US Crude

The price of crude oil is expressed in US dollars (USD). As a result, every uptick or downtick in the dollar or the price of a commodity causes an immediate realignment between the greenback and a variety of Forex crosses. These movements are less correlated in countries with small crude oil reserves, such as Japan, and more correlated in countries with large reserves, such as Canada, Russia, and Brazil. Because the energy sector contributes significantly to US GDP, the dollar has benefited from crude oil's precipitous decline. The petrodollar system is a system in which countries that buy crude oil and those who produce it exchanges USD. While the United States has risen in the global petroleum production rankings, the US dollar has benefited from crude oil's sharp decline for a variety of reasons.