Surging oil price and 'weak' dollar may trigger inflation?

Surging oil price and 'weak' dollar may trigger inflation?
Oct 30, 2007 01:28
DREAMLIFE Points: Join Date: Sep 5, 2007 Status: offline	Impacted by Mexican production cutbacks, OPEC's reluctance to increase output ahead of the northern hemisphere winter when demand for heating fuel and Turkey-Iraq tension, the oil price exceeded 93 dollars a barrel. Meanwhile, more and more investors believe that the Fed will continue to cut interest rates tomorrow. Thus, dollar exchange rate hit a new record low. The gold price also reaches its highest level for 28 years-----800 dollar a troy ounce. Why did it rise so sharply? Many investors start to buy gold due to the high oil price and weak dollar. Some analysts say that this move shows that those investors fear the rising inflation. What are your opinions on this issue? Will the Fed cut interest rates again? Inflation risk will be escalating?

Oct 30, 2007 01:28

DREAMLIFE
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Join Date: Sep 5, 2007
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Impacted by Mexican production cutbacks, OPEC's reluctance to increase output ahead of the northern hemisphere winter when demand for heating fuel and Turkey-Iraq tension, the oil price exceeded 93 dollars a barrel. Meanwhile, more and more investors believe that the Fed will continue to cut interest rates tomorrow. Thus, dollar exchange rate hit a new record low.

The gold price also reaches its highest level for 28 years-----800 dollar a troy ounce. Why did it rise so sharply? Many investors start to buy gold due to the high oil price and weak dollar. Some analysts say that this move shows that those investors fear the rising inflation.

What are your opinions on this issue? Will the Fed cut interest rates again? Inflation risk will be escalating?

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