Relationship between the Dollar, Price of Oil and the U.S. Trade Deficit

Relationship between the Dollar, Price of Oil and the U.S. Trade Deficit Synopsis

Rapid changes in the price of oil and the impact of such price changes on economies around the globe have attracted considerable attention. In mid-2008 as the price of oil rose to unprecedented heights and then dropped sharply, the international exchange value of the dollar fell and then rose relative to a broad basket of currencies. For some, these two events seem to indicate a cause and effect relationship between changes in the price of oil and changes in the value of the dollar. This book analyzes the relationship between the dollar and the price of oil and how the two might interact and provides an assessment of the impact a range of prices of imported oil could have on the U.S. trade deficit.