Dollar Declines on Oil Shortage Expectations

The U.S. dollar began today’s trading session with a rather strong decline against the euro, after posting a significant gain yesterday, as the investors expect the oil prices to surge on the Middle East conflict.
The European currency is the best performer in the Forex market currently. It lacks the dependence on the oil, unlike the U.S. dollar; it also has the highest interest rate among the top four currencies, which makes it more competitive than the yen.
The Gaza Strip conflict inspires a fear into the investors as the full-scale was action in the region may disturb the oil supply and lead to the shortage on the market, spurring the prices up. Oil prices are nominated in dollars — so, when the oil goes up dollar will most probably go down.
Analysts believe that during the times of serious war conflicts in the Middle East or the other oil-rich regions the euro becomes the traders’ best safe haven, pushing out the dollar and the yen from this position.
EUR/USD went up from 1.3960 to 1.4067 as of 7:34 GMT today. GBP/USD rose from 1.4414 to 1.4481, while USD/JPY declined from 90.68 to 90.36.

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