The dollar foreshadows shock

The simultaneous growth of the dollar and oil prices is rapidly increasing the risk of a global energy shock. Typically, the quotes of these assets are multidirectional, but this time the opposite is true.
The dollar index reached monthly highs, bargaining on Wednesday to 18:22 Moscow time at 95.23. The official dollar rate on October 4, according to the data of the Central Bank of the Russian Federation, rose by 20.23 kopecks, to 65.4244 rubles. The euro increased by 50.81 kopecks, amounting to 75.7353 rubles.
Oil topped on Wednesday the level of $ 85 per barrel of Brent against the backdrop of the promised US sanctions against Iran, which have not even entered into force. However, Iran’s customers are already frantically searching for alternative sources of hydrocarbon supplies.
Considering the fact that emerging market currencies are losing even more against the dollar, and oil prices are denominated in US currency, many countries may face an energy shock that could have more severe consequences than the debt crisis.
And while there are no grounds for correction of the dollar and oil prices. The Fed continues to bend its hard line, the oil market does not yet see how to compensate for Iranian oil.
The US president Donald Trump blames OPEC and Russia for the rise in oil prices. However, oil-producing countries are absolutely not interested in a critical increase in energy prices, as no less than consumers will suffer from this.
In turn, Russian President Vladimir Putin said Wednesday that he would advise the American leader to look in the mirror in search of the culprit for the rise in oil prices.
“We had a very good meeting with President Trump in Helsinki,” TASS quoted Putin as saying. “But if we touched on a topic that we are discussing now, I would tell him that if you want to find the culprit in the increase in prices [in oil], Donald, then you need to look in the mirror. "
In this connection, the Russian president recalled the influence of geopolitical factors on oil prices.
“They do exist, they really play on the market,” he stated. “It’s better not to interfere with these market processes, not to try to gain any competitive advantages at the expense of political tools and not to regulate, as in the Soviet Union, the prices [of oil ]: it doesn’t do much good. "
The head of state noted that actions agreed with OPEC are in fact market instruments. “We only equalize supply and demand in the market, that's all,” he stated. “The rest is geopolitical factors that influence prices,” the president added.