What is the relationship among a weak dollar, interest rate and high oil prices?

Question

What is the relationship among a weak dollar, interest rate and high oil prices?

Answer 1

weak dollar = not enough to buy oil and such. in 1998, $45 = 1 barrel of oil. Now dollar is weaker(became cheaper or less valued) so you have to spend $135 = 1 barrel of oil. It's not only weakening dollar that causes increase in gas prices. The use of oil is increased all over the world so more supply is needed. So when demand>supply, the prices go up.

Answer 2

A weak dollar means that we are getting less for the same amount of money.  When the dollar is weak interest rates rise for many reasons.  When there is inflation people who take out loans or already have adjustable loans are more likely to default.  Many will file for bankruptcy and the banks need to cover those costs through the higher rates.  Other countries will charge America higher interest rates when the dollar is weak to compensate for our over-inflated currency.  When the price of oil increases as significantly as it has many families with tight budgets have to re-evaluate spending habits and cut down or eliminate expendable costs like dining out or going to the movies and vacations.  As a result more American businesses shut down further weakening the dollar and the increase of those who lose their jobs filing for unemployment increases interest rates to compensate for government spending.

Answer 3

if you talk in the perspective of one country's economics, then weak dollar means, there will be more outgo of domestic currency for any of your foreign purchase including oil. Tht is one thing. now demand is more than supply in case of oil so prices are increasing. This means more outflow of your domestic currency out of your country. Means you need more domestic money to be extracted from within your country. To do that , you have to hike interest rate...