Reply #67: Don't know - found this: "Euro option-related defense"? [View All]

[54anickel]

http://today.reuters.co.uk/investing/financeArticle.aspx?type=usDollarRpt&storyID=URI:urn:newsml:reuters.com:20050829:MTFH65249_2005-08-29_14-29-42_N29366950:1

NEW YORK, Aug 29 (Reuters) - The yen fell broadly on Monday as the spike in oil prices stoked fears of an economic slowdown in Japan, which imports all of its crude requirements.

The dollar came under pressure during the Asian session due to the jump in crude costs. The euro traded as high as $1.2345, according to Reuters data, before option-related defense of the $1.2350 barrier brought the euro lower.

The U.S. currency has proven to be surprisingly resilient since then, although dealers said volume was thin with the London market closed due to a bank holiday.

U.S. crude oil futures soared to a record $70.80 on Monday as Hurricane Katrina strengthened into one of the fiercest storms ever seen in the United States, threatening oil production facilities in the northern Gulf of Mexico.

"With higher oil prices, markets are buying a lot of euros against the yen, and dollar/yen rose with it," said Grant Wilson, vice president of foreign exchange at Mellon Bank in Pittsburgh.

more...

Why would higher oil prices push sales of euros against yen? You need bucks to buy oil. Must be a new strategy to push the buck up without actually buying the damned thing. :shrug: