How Logical is the Link Between Oil and the Dollar?

Reuters reports the International Energy Agency (IEA) will announce the results of its 30-day review of an emergency reserves release.

The market news is quoted as saying,

The release from emergency stockpiles was only the third in the 37-year history of the IEA, and the announcement last month initially prompted a 6 percent sell-off on the oil market.

On the currency markets, the dollar index rose 0.9 percent on the day, exaggerating the negative correlation that typically characterises the relationship between oil and the U.S. currency.

Oil prices have since recovered, with Brent crude futures trading above $116 per barrel, versus just over $114 before the reserves release.

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