127
ests through the imposition of a monetary system and a fixed currency. In the same
vein, following the establishment of the dollar regime and the hegemony of the dollar in the international arena, it proposed a dollar deal. The agreement of the Middle
East countries to sell oil with the dollar also played an important role in stabilizing
the dollar hegemony and thus the hegemonic position of the United States (Pour
Ahmadi and Sadoughi 2010:153).
Other factors that have led to fluctuations in dollar exchange rates over recent
years in comparison with other internationally valued currencies and eventually oil
price changes were the global financial crisis; the crisis that began in the United
States was marked by the initial signs of the global financial crisis that emerged in
2005, rooted in the September 11 incident, but in particular, the crisis began in
2007 in the US housing sector and gradually affected all sectors of the US economy
and gradually reduced the value of the dollar (Pour Ahmadi and Sadoughi 2010:155).
Factors such as the level of production capacity of OPEC and non-OPEC members and the amount of consumption affect the price of oil. Changes in oil prices as
prices rise or fall sharply, or in other words, the impact of oil price shocks on each
of the players in the global oil market, including consumers, producers, and international oil companies (http://ensani.ir 2019).
As it was said, the crisis began with the US housing sector. The US banks offered
high-rate facilities at low rates and easy housing conditions for applicants. This
resulted in very significant assets in the quality of the bank’s balance sheet. With the
reversal of the gradual decline in US interest rates that began in 2005, and since
these loans were granted at floating rates, mortgage lending went up. This raised
housing prices in the country, with housing prices rising by 124% between 1997 and
2006. With this incident, one-third of the borrowers did not have the ability to pay
installments and, on the other hand, increased loan debt raised interest rates on
loans, sometimes raised the value of loans from the value of the collateral. Therefore,
many home loan lenders in the United States left the bank their collateral and property, since the loan principal was of higher value. The crisis in the US mortgage
market has led the Fed to lower interest rates, facilitating a loan repayment swap. In
sum, these issues reduced the gradual increase of the dollar (Pour Ahmadi and
Sadoughi 2010:156).
Between January 2006 and January 2008, with the release of the signs of the
global crisis in mid-2007, the Dollar lost 24% of its value against the Euro, causing
a rise in nominal oil prices. While the euro was gradually rising in the course of the
year, and so the price of oil was much lower than the dollar in euro, the global recession, aggravated by the start of the 2003 war, led to a further decline in the dollar
exchange rate and an unprecedented increase in the oil price was followed in July
2008 (Pour Ahmadi and Sadoughi 2010:156).
In spite of numerous factors affecting the oil price, the role of the US in terms of
supply and consumption markets, oil reserves, and in particular dollar equity developments, are among the most important factors affecting oil price changes. NonOPEC has been especially popular since 2001 (http://ensani.ir 2019).
In July 2008, the value of the US dollar declined further due to the economic
figures published in the European and American financial markets, fluctuations in
Fluctuations in the Dollar Exchange Rate and Oil Price Changes
ests through the imposition of a monetary system and a fixed currency. In the same
vein, following the establishment of the dollar regime and the hegemony of the dollar in the international arena, it proposed a dollar deal. The agreement of the Middle
East countries to sell oil with the dollar also played an important role in stabilizing
the dollar hegemony and thus the hegemonic position of the United States (Pour
Ahmadi and Sadoughi 2010:153).
Other factors that have led to fluctuations in dollar exchange rates over recent
years in comparison with other internationally valued currencies and eventually oil
price changes were the global financial crisis; the crisis that began in the United
States was marked by the initial signs of the global financial crisis that emerged in
2005, rooted in the September 11 incident, but in particular, the crisis began in
2007 in the US housing sector and gradually affected all sectors of the US economy
and gradually reduced the value of the dollar (Pour Ahmadi and Sadoughi 2010:155).
Factors such as the level of production capacity of OPEC and non-OPEC members and the amount of consumption affect the price of oil. Changes in oil prices as
prices rise or fall sharply, or in other words, the impact of oil price shocks on each
of the players in the global oil market, including consumers, producers, and international oil companies (http://ensani.ir 2019).
As it was said, the crisis began with the US housing sector. The US banks offered
high-rate facilities at low rates and easy housing conditions for applicants. This
resulted in very significant assets in the quality of the bank’s balance sheet. With the
reversal of the gradual decline in US interest rates that began in 2005, and since
these loans were granted at floating rates, mortgage lending went up. This raised
housing prices in the country, with housing prices rising by 124% between 1997 and
2006. With this incident, one-third of the borrowers did not have the ability to pay
installments and, on the other hand, increased loan debt raised interest rates on
loans, sometimes raised the value of loans from the value of the collateral. Therefore,
many home loan lenders in the United States left the bank their collateral and property, since the loan principal was of higher value. The crisis in the US mortgage
market has led the Fed to lower interest rates, facilitating a loan repayment swap. In
sum, these issues reduced the gradual increase of the dollar (Pour Ahmadi and
Sadoughi 2010:156).
Between January 2006 and January 2008, with the release of the signs of the
global crisis in mid-2007, the Dollar lost 24% of its value against the Euro, causing
a rise in nominal oil prices. While the euro was gradually rising in the course of the
year, and so the price of oil was much lower than the dollar in euro, the global recession, aggravated by the start of the 2003 war, led to a further decline in the dollar
exchange rate and an unprecedented increase in the oil price was followed in July
2008 (Pour Ahmadi and Sadoughi 2010:156).
In spite of numerous factors affecting the oil price, the role of the US in terms of
supply and consumption markets, oil reserves, and in particular dollar equity developments, are among the most important factors affecting oil price changes. NonOPEC has been especially popular since 2001 (http://ensani.ir 2019).
In July 2008, the value of the US dollar declined further due to the economic
figures published in the European and American financial markets, fluctuations in
Fluctuations in the Dollar Exchange Rate and Oil Price Changes