In this video, you will learn about the correlation between the US dollar and Crude Oil. As you can see, there are three lines marked on this chart. The blue line represents the USD/CAD pair. The orange line represents the EUR/USD pair. The lower line represents the oil.
As oil rallies, the euro has rallied. However, the US dollar fell. This happened when there was a banking crisis in Italy. The dollar has weakened during this period. Hence this is a positive correlation.
When you look at the USD/CAD pair, it has fallen. Canada is the major oil exporter in the world. So, the functioning of the market is based on supply and demand. As the price of the oil increased, this increased the demand for the Canadia dollar, but decreased the demand for the greenback.
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