A Study on Currencies – Gold - Crude and Trade Balance
Introduction: The purpose of the foreign exchange market ‘FOREX’ is to assist international trade and investment. The
foreign exchange market allows business to convert one currency to another foreign currency. In terms of volume of trading,
it is the largest market in the world. The foreign exchange market facilitates international trade and capital movement, the
credit function performed by foreign exchange markets also plays a very important role in the growth of foreign trade, for
international trade depends to a great extent on credit facilities. While Gold as a commodity, is considered to be a hedge
against inflation, recession, and other times of uncertainties. Gold and the US dollar still hold a pull over each other even
today. The association developed from the use of gold and silver standards to set the values of currencies in the past. The US
dollar plays a major role in the price movements of crude oil also. As commodities trade globally, often using the US dollar
as a medium, price movements in the US dollar have important consequences. A weak US dollar is considered positive for
crude oil producers and a strengthening US dollar is often viewed as negative for the crude producers.
Research Methodology: The paper attempts to find the relationship between US Dollar, Crude Oil and Gold. The present
study follows a descriptive research design. The source of data is secondary for the study. The analysis of the data is done
using inferential statistics.
Major Findings: The analysis reveals that there is significant impact of US dollar currency on gold price. It can be
concluded that the crisis had effect on the crude oil price.
Managerial Implications: The outcome of the study could be considered by investors, government as inputs in making