1. Newsroom
  2. Oil prices: implications for FX markets
Menu
Analysen 12.03.2020

Oil prices: implications for FX markets

Oil prices: implications for FX markets

Our EM macro and FX Strategist Koon Chow and our Global Head of Forex Strategy Peter Kinsella discuss the steep decline in the oil price and its significant implications for FX markets.



On Monday, oil prices fell by nearly 30% following Saudi Arabia’s decision to increase its oil production by 1.5 million barrels per day, which surprised markets as they had anticipated that OPEC and Russia would cut output. The decision to dramatically increase it instead is an explicit attempt to drive higher-cost oil producers out of business. Investors need to be prepared for an extended period of low oil prices: in 2014, Saudi Arabia pursued a similar strategy and it took nearly two years for OPEC to eventually agree on production cuts to bolster the price.

This will have significant implications for the global economy. For oil-producing countries, energy-related investments will decline substantially and their currencies will continue to weaken as their terms of trade worsen. Energy importers will benefit from lower oil prices, but amid heightened risk-aversion any savings are unlikely to be spent. Meanwhile central banks will maintain a loosening bias, because lower oil prices will reduce core and headline inflation rates around the world.

Our expertise

Peter_Kinsella_150x150.jpg
Peter Kinsella
Global Head of Forex Strategy

CHOW_Koon_150x150.jpg
Koon Chow
EM Macro and FX Strategist

Download the podcast
Expertise

Diskretionäres Portfolio-management: Sie haben die Zügel in der Hand

Ihre Ziele und Wünsche sind einzigartig – genauso wie unser Ansatz im diskretionären Portfoliomanagement
Mehr
Expertise

Swiss & Global Equities

Why Swiss equities now? This market offers equity investors the stability and agility they need to navigate this volatile period. 

Read more
Expertise

European Equities

European equities offer unrivalled opportunities in terms of breadth of sector and market exposure.

Read more

Meistgelesene News

Analysen 10.02.2021

COVID-19: Die UBP hält Sie auf dem Laufenden

Seit dem Ausbruch des Coronavirus begleiten und unterstützen wir unsere Kunden während dieser ungewöhnlichen Zeit einer weltweiten Gesundheitskrise. Die Bank informiert Sie regelmässig über die Anpassungen ihrer Massnahmen an die von den Gesundheitsbehörden vorgegebenen Vorsichtsregeln. Ausserdem kommen unsere Experten zu Wort, welche auf die Auswirkungen der Pandemie auf die Weltwirtschaft und die Finanzmärkte eingehen.

Analysen 17.12.2020

UBP Investment Outlook 2021

Schöne neue Welt

Analysen 24.11.2020

Perlen im SMID-Cap-Segment in Europa und der Schweiz

Unternehmen kleiner und mittlerer Kapitalisierung verzeichnen oftmals höhere Wachstumsraten und Renditen als Grosskonzerne. Es ist einfacher, ein kräftiges Wachstum von einer kleineren Basis aus zu generieren. Die sogenannten SMID Caps bieten Anlegern eine Positionierung in langfristigen Wachstumstrends.


Auch lesenswert

Analysen 14.04.2021

The vaccine disrupting the pharma industry

UBP talks to Stéphane Bancel, Moderna CEO, to learn how the mRNA technology not only made one of the first COVID-19 vaccines possible, but, more importantly for investors, has the potential to disrupt the broader pharmaceutical industry in its wake.

Analysen 05.04.2021

Transitioning to a Brave New World

Volatility is back in Chinese equity markets: after rallying 90% from its trough in March 2020 to a peak in February 2021, MSCI China has fallen by 16% over the past month.

Analysen 24.03.2021

Diskretionäres Portfolio-management: Sie haben die Zügel in der Hand

Ihre Ziele und Wünsche sind einzigartig – genauso wie unser Ansatz im diskretionären Portfoliomanagement