Notwithstanding last week’s rumors that the world’s largest oil producers were planning to abandon the US dollar as the pricing currency for their oil, prices shot up almost 80 cents a barrel this morning to $74.06 by 9:00 am New York time. Investors are turning more and more to commodities as a hedge against inflation which many fear is inevitable in the face of the massive government stimulus spending during the global recession.
Melvyn Boey, deputy director of Asian equity research for Bank of America Merrill Lynch, noted that the US dollar remains weak and the long-term outlook continues to be bearish towards the greenback.
“The U.S. dollar has weakened considerably over the last four weeks and we don’t expect that trend to reverse,” Boey said. “If you look at it, they (the U.S.) are printing money.”
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