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STRONG CORRELATION BETWEEN EURO AND OIL PRICES - CMC MARKETS


CMC Markets Market Analyst Jasper Lawler says there is a strong correlation between the euro and oil prices.
SHOWS: LONDON, ENGLAND, UK (JANUARY 7, 2015) (REUTERS - ACCESS ALL)
1. CMC MARKETS MARKET ANALYST JASPER LAWLER, SAYING:
JOURNALIST ASKING JASPER LAWLER: "Given that the euro has hit a 9 year low, how will the low oil price affect the EU financial market?"
LAWLER: "Well I think it is two-fold. Really the driver behind both the movement we have seen in the euro and in oil prices is in part just the strength of the U.S. dollar. So as we see oil prices move lower, that is in part related to the strengthening dollar and in combination with that you will see a lower euro. And it also feeds into this whole inflation equation whereby the lower oil price brings down inflation in the euro zone and that then feeds into ECB policy where they are obviously trying to bring in their mandate of 2 percent inflation. We are looking at deflation in the euro zone at the moment so that brings on the prospect of quantitative easing in the euro zone which would devalue the euro and push prices in the euro even lower. So there is definitely a strong correlation there as goes the euro, so goes oil, as goes oil, so goes the euro."
JOURNALIST: "Saudi Arabia has made big cuts to oil prices - why are they still doing this?"
LAWLER: "Well there was lots of speculation for the reason at the last meeting at OPEC as to why exactly they didn't cut production but since then it has really just become absolutely crystal clear just from the comments of the OPEC members, particularly from Saudi Arabia, that their aim here is for market share, it is not to maintain oil prices at a certain level. OPEC appreciate that their percentage of global oil production is less than it once was with the rise of production in the U.S. and in Russia and OPEC members, particularly Saudi Arabia, are aware that they just have a lower cost to get the oil out of the ground than some of these shale producers, par...