By Ben Rooney, CNNMoney.com staff writer
Dollar strengthens. Crude prices came under pressure Thursday afternoon in response to gains made by the U.S. dollar against other currencies.
The euro fell to $1.532 from $1.5412 on Wednesday.
The 15-nation currency started to slide after European Central Bank president Jean-Claude Trichet warned that economic growth in Europe is expected to be weak during the third quarter, prompting speculation that the central bank will not raise interest rates to fight inflation.
The ECB also announced its decision to hold a key interest rate steady at 4.25%, as expected.
Oil prices often fall when the greenback gains ground, partly because a more robust dollar makes oil more expensive for overseas buyers.
Crude and other dollar-denominated commodities have also been popular with investors in the U.S. looking for a hedge against inflation. But when the dollar rises and inflation fears abate, these investors often exit the oil market.
Dollar strengthens. Crude prices came under pressure Thursday afternoon in response to gains made by the U.S. dollar against other currencies.
The euro fell to $1.532 from $1.5412 on Wednesday.
The 15-nation currency started to slide after European Central Bank president Jean-Claude Trichet warned that economic growth in Europe is expected to be weak during the third quarter, prompting speculation that the central bank will not raise interest rates to fight inflation.
The ECB also announced its decision to hold a key interest rate steady at 4.25%, as expected.
Oil prices often fall when the greenback gains ground, partly because a more robust dollar makes oil more expensive for overseas buyers.
Crude and other dollar-denominated commodities have also been popular with investors in the U.S. looking for a hedge against inflation. But when the dollar rises and inflation fears abate, these investors often exit the oil market.
posted by Blue @ 11:30 PM
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