Try to read all of this over at FT Markets, where Mansoor Mohi-uddin, chief FX strategist of UBS Bank has a thought provoking piece on the impact of shale. I'll only use the first and final paragraphs, read it all if you are a subscriber:

The future of the dollar is more likely to be determined in the shale gas and oilfields of Dakota and Texas than in the sovereign wealth funds of Asia and the Middle East. This is because striking new technological developments are set to transform America’s energy supplies, significantly improving the US balance of payments and the long-term outlook for the greenback.

Thus the conventional wisdom of an ever-weakening greenback is likely to become obsolete. Over the next decade, the currency is set to benefit from the US’s reduced reliance on foreign energy. That will be a positive shock for US consumers and companies and a negative shock for long-term dollar bears.

Check out the comments.Obviously the conventional wisdom FX crowd have a lot in common with the conventional wisdom energy crew. Again this sounds like the Sinclair Lewis Theorem: They don't want to believe.

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  • Andy

    I haven't read the article, but in the past year or so, I've noticed that the dollar is moving inversely to WTI and it seems no matter what is going on with the shale drillers, QE has devalued the dollar so much that oil markets respond more to hedging the dollar than to supply.<br /><br />It looks to me we are getting crucified on a cross of crude and $100/bbl oil is a guaranteed protection against economic recovery. Of course, Prince Talal has promised us that His Majesty of Saudi Arabia does not want oil to go over $100. (Check the closing price of WTI today.)<br /><br />Of course if high oil prices are guaranteed due by QE if not by supply (I'm stretching here, I realize) we could profit by exporting our oil products, but we have politicians and environmentalists who promise us that pipelines are unneeded because the greedy oil companies will just use them to export oil.<br /><br />Some people do not seem to think that some people will want drill bit ready jobs before election day if the shovel ready jobs do not show up. Also, some seem to think that exports are evil, but do not seem to hazard a moral opinion on trade deficits.

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