The Essence of Relationships between the Crude Oil Market and Foreign Currencies Market Based on a Study of Key Currencies
Structural changes occurring in the crude oil market have stimulated the emergence of hypotheses suggesting that the relationship between prices of this raw material and the US dollar exchange rate can gradually become similar to that observed between oil prices and exchange rates of the currencies...
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| Format: | Article |
| Language: | English |
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MDPI AG
2021-11-01
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| Series: | Energies |
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| Online Access: | https://www.mdpi.com/1996-1073/14/23/7978 |
| _version_ | 1797507847736524800 |
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| author | Marek Szturo Bogdan Włodarczyk Ireneusz Miciuła Karolina Szturo |
| author_facet | Marek Szturo Bogdan Włodarczyk Ireneusz Miciuła Karolina Szturo |
| author_sort | Marek Szturo |
| collection | DOAJ |
| description | Structural changes occurring in the crude oil market have stimulated the emergence of hypotheses suggesting that the relationship between prices of this raw material and the US dollar exchange rate can gradually become similar to that observed between oil prices and exchange rates of the currencies of the countries whose revenues from the export of this resource are a significant part of their current account balance. The purpose of this study was to determine and evaluate the time-varying dependence between oil prices and the exchange rate of the US dollar in the context of the same relationship for the Chinese, European, Japanese, Saudi, and Russian currencies. The results of our analyses implicate that a negative correlation between the variables in question grows stronger in time periods preceding global shocks and during thereof. The dominance of the USD in the crude oil market is reflected in similar characteristics of the correlations of the currencies of other countries, such as China, countries of the Euro area, or Japan. As for countries exporting crude oil, the situation varies. The results of our research suggest the lack of a stable relationships between prices of crude oil and currency exchange rates. It is also impossible to observe a long-term, unequivocal tendency of the currencies of oil exporting countries being positively correlated with oil prices. Russia was the closest to this situation. In Saudi Arabia, a positive correlation emerged during moments of crisis. |
| first_indexed | 2024-03-10T04:54:14Z |
| format | Article |
| id | doaj.art-5a254534716a4157af9456932a278a30 |
| institution | Directory Open Access Journal |
| issn | 1996-1073 |
| language | English |
| last_indexed | 2024-03-10T04:54:14Z |
| publishDate | 2021-11-01 |
| publisher | MDPI AG |
| record_format | Article |
| series | Energies |
| spelling | doaj.art-5a254534716a4157af9456932a278a302023-11-23T02:20:48ZengMDPI AGEnergies1996-10732021-11-011423797810.3390/en14237978The Essence of Relationships between the Crude Oil Market and Foreign Currencies Market Based on a Study of Key CurrenciesMarek Szturo0Bogdan Włodarczyk1Ireneusz Miciuła2Karolina Szturo3Department of Finance, Faculty of Economic Sciences, University of Warmia and Mazury, 10-720 Olsztyn, PolandDepartment of Finance, Faculty of Economic Sciences, University of Warmia and Mazury, 10-720 Olsztyn, PolandDepartment of Sustainable Finance and Capital Markets, Institute of Economics and Finance, University of Szczecin, 70-453 Szczecin, PolandDepartment of Systems Engineering, Faculty of Technical Sciences, University of Warmia and Mazury, 10-720 Olsztyn, PolandStructural changes occurring in the crude oil market have stimulated the emergence of hypotheses suggesting that the relationship between prices of this raw material and the US dollar exchange rate can gradually become similar to that observed between oil prices and exchange rates of the currencies of the countries whose revenues from the export of this resource are a significant part of their current account balance. The purpose of this study was to determine and evaluate the time-varying dependence between oil prices and the exchange rate of the US dollar in the context of the same relationship for the Chinese, European, Japanese, Saudi, and Russian currencies. The results of our analyses implicate that a negative correlation between the variables in question grows stronger in time periods preceding global shocks and during thereof. The dominance of the USD in the crude oil market is reflected in similar characteristics of the correlations of the currencies of other countries, such as China, countries of the Euro area, or Japan. As for countries exporting crude oil, the situation varies. The results of our research suggest the lack of a stable relationships between prices of crude oil and currency exchange rates. It is also impossible to observe a long-term, unequivocal tendency of the currencies of oil exporting countries being positively correlated with oil prices. Russia was the closest to this situation. In Saudi Arabia, a positive correlation emerged during moments of crisis.https://www.mdpi.com/1996-1073/14/23/7978crude oilcurrenciescorrelationforecasting modelsmodeling the risk of energy commoditiesglobal energy markets |
| spellingShingle | Marek Szturo Bogdan Włodarczyk Ireneusz Miciuła Karolina Szturo The Essence of Relationships between the Crude Oil Market and Foreign Currencies Market Based on a Study of Key Currencies Energies crude oil currencies correlation forecasting models modeling the risk of energy commodities global energy markets |
| title | The Essence of Relationships between the Crude Oil Market and Foreign Currencies Market Based on a Study of Key Currencies |
| title_full | The Essence of Relationships between the Crude Oil Market and Foreign Currencies Market Based on a Study of Key Currencies |
| title_fullStr | The Essence of Relationships between the Crude Oil Market and Foreign Currencies Market Based on a Study of Key Currencies |
| title_full_unstemmed | The Essence of Relationships between the Crude Oil Market and Foreign Currencies Market Based on a Study of Key Currencies |
| title_short | The Essence of Relationships between the Crude Oil Market and Foreign Currencies Market Based on a Study of Key Currencies |
| title_sort | essence of relationships between the crude oil market and foreign currencies market based on a study of key currencies |
| topic | crude oil currencies correlation forecasting models modeling the risk of energy commodities global energy markets |
| url | https://www.mdpi.com/1996-1073/14/23/7978 |
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