Forex Blog: Currency Trading News & Analysis.

December 6th 2005

OPEC nations shift forex reserves into USD

Many economists and currency traders have suspected that the nations of OPEC (as well as other net oil exporters) were reinvesting the proceeds of rising oil sales into dollar-denominated assets. This theory was recently borne out by a release of official OPEC statistics, which indicate that OPEC nations have collectively shifted their forex holdings into USD. Specifically, 69% of OPEC forex reserves are now held in USD, which represents an 8% increase from last year. Many experts believe OPEC to be extremely sensitive to changes in interest rates. Accordingly, as the US Federal Reserve has repeatedly raised interest rates, OPEC nations have moved capital into the US in order to earn higher returns. The Financial Times reports:

If interest rate differentials are key to Opec behaviour, the start of the eurozone tightening cycle could end the dollar’s newfound popularity.

Read More: Dollar’s rise aided by Opec holdings

SocialTwist Tell-a-Friend
Posted by Adam Kritzer | in Central Banks, US Dollar | No Comments »

Sponsored Offers

FREE Daily Email Updates

Enter your email address:

Delivered by FeedBurner

Have Questions? Want to Share Your Review?

Be heard. Please share your reviews today!

Neighboring Posts

© 2004 - 2024 Forex Currency charts © their sources. While we aim to analyze and try to forceast the forex markets, none of what we publish should be taken as personalized investment advice. Forex exchange rates depend on many factors like monetary policy, currency inflation, and geo-political risks that may not be forseen. Forex trading & investing involves a significant risk of loss.