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Page added on August 29, 2008

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It may be too soon to exit oil-dollar bet

NEW YORK (Reuters) – The long oil/short dollar bet may be off the table for now as energy prices ease and the U.S. currency rises, but inflation and inherent risks in commodities supply could bring this popular trade back.

For over a year, one of the main themes in currency and commodity markets has been to short — or sell — the dollar as U.S. economic health looked suspect, and go long — or buy — oil as an insurance against inflation and uncertainties in raw materials supply.

That strategy was one of the main factors that helped push the dollar to historic lows while crude prices doubled from a year ago to record highs of nearly $150 a barrel in July.


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