Strong U.S. Dollar and Cheap Oil Help to Boost World Economy:
By Simon Kennedy Jan 19, 2015 7:00 PM ET
The plummeting price of oil and surging U.S. dollar are increasing growth throughout the world, according to the Bloomberg Global Poll.
Three-quarters of responding investors, analysts and traders who are Bloomberg subscribers said oil’s 55 percent plunge since June will spur worldwide expansion. Fifty-eight percent said gains in the dollar against currencies such as the the euro and yen will help more than hurt.
The encouraging perception of two of the most important trends shaping financial markets helps allay concern that cheaper crude reflects a slowing world economy that could be pinched if the greenback keeps rising. Both are likely to be the subject of debate at the World Economic Forum’s annual meetings this week in Davos, Switzerland.
“Practically every industry is a consumer of energy, and the decline in oil has seen the price of a key input decline,” said Graham Davidson, a poll participant and currency trader at National Australia Bank Ltd. in London. “All else equal, it improves corporate profitability, improves consumers’ spending power and will ultimately encourage productive investment.”
Underscoring that view, 72 percent said the oil slide reflects increased supply rather than slumping demand. Even as oil posted its biggest annual decline since 2008, the Organization of Petroleum Exporting Countries resisted calls to cut output and the U.S. pumped at the fastest rate in more than three decades.
More:
http://www.bloomberg.com/news/2015-01-20/oil-slump-as-dollar-surges-seen-improving-economy-in-global-poll.html
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