Analysis Of The Impact Of US Dollar Exchange Rate On Oil Price

In today’s world, the economic of America has become recovery out of the financial crisis. Meanwhile, the rate of the emerging countries’ economic, like Russia and India, has slown down. It gives great opportunity for America to develop in the later time. As we all known, because of robust economic, and being the largest import and export country, the American Dollar has been the International currency to exchange and to be stockpiled.In the past hundred years, energy resource becomes essential to all areas of industries for development. However, burning coal left the harm influence to the surroundings after the Industrial Revolution. So oil is the best resource because of its clean burning.In the current research, many scholars have studied more about the American exchange rate, the influence element of the oil price, the ways on how the Dollar effects oil price, and so on. In this essay, I make the research of impact action between Dollar and the International oil price. In the evolvement of the exchange rate arrangement, I learn that the Dollar stands in a high place in the whole history. SO, I make my core study in the analysis of relationship between the Dollar exchange rate and oil price.I use VAR mode to make comparison between the Dollar exchange rate and oil price, in order to learn whether the Dollar exchange rate could effect oil price. And then I use Granger Causal Relation Test to test the causal relation between both variable.In this essay, I have many innovations. After a detailed analysis of three parts of the exchange rate system’s evolvement, and the ways to fix oil price, I learn whether the evolvement of the exchange rate system could effect the oil price. Then after the test of VAR mode and Granger Causal Relation Test, I could confirm that the causal relationship between the Dollar exchange rate and the oil price. And then I can learn that the Dollar exchange rate and the oil price influence eachother depending on time.After learning the effection on ways and reasons, it make me to be well aware of the current oil market. The float of the oil price has a great impact on global economic, including China’s. In order to avoid the external risk and harmful affection on the China’s oil market, to get rid of the excessive dependence on the oil, I put forward some suggestions on how to resolve the present problems.