U.S. shale revolution beginning to support dollar, analysts say

|By:, SA News Editor

The U.S. shale oil revolution is beginning to exert a direct benefit to the U.S. dollar, UBS currency strategists say as a booming U.S. energy sector helped the U.S. trade deficit narrow to the smallest since late 2009.

The dollar will benefit over time from the energy revolution, Societe Generale says: “Global reserve currency status allied with less dependence on foreign investors will boost the currency on a five-year view.”

According to a BNP Paribas study, the combination of higher exports and reduced petroleum imports could benefit the dollar’s fundamental equilibrium exchange rate by as much as 16% on a 10-year horizon.