Fracking Boom Is Dollar Boon in Energy Independence: Currencies
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Oil’s negative drag on the dollar is weakening as rising U.S. natural gas and crude production propels the nation to the highest level of energy self-sufficiency in two decades.
The boom from hydraulic fracturing, or fracking, which uses pressurized water to drive gas and oil from shale rock, will bolster the greenback by narrowing the current-account deficit and trimming cash paid to oil exporters that then diversify away from U.S. assets, according to UBS AG. The dollar will be on average 2 percent stronger against 46 currencies by the end of 2014, as the price of West Texas Intermediate crude rises 14 percent, according to Bloomberg economist surveys.