2014 Charts of the Week

Unleaded Gasoline Prices vs US Dollar Strength

Chart of the Week for November 21, 2014 - November 27, 2014

Since late April 2014, the price of unleaded gasoline has fallen with an increase in the value of the U.S. Dollar.

The recent decrease in gasoline prices has been a pleasant surprise for U.S. consumers. For the one year period ending October 31, 2014, the average price for a gallon of unleaded gasoline fell about 8% and dropped from a high of $3.70 on April 27 to a low of $3.00 on October 31. Along with seasonal factors of supply and demand, the price of gasoline was impacted by the strengthening U.S Dollar. The U.S. Dollar Index has risen 9% since the April 27 peak in gasoline prices. Since the U.S. Dollar is the world currency for oil trading, gasoline and oil prices tend to move opposite of the U.S. Dollar. This trend is shown in the chart above that compares the daily price of unleaded gasoline to the daily value of the U.S. Dollar Index.

The U.S. Dollar is just one factor in the price of gasoline and other factors may overwhelm its influence at times. For now, the decline in gasoline prices has benefited U.S. consumers and helped lower overall inflation. As always, it is important to keep in mind that past performance and trends do not guarantee future performance.

© Copyright 2017 ICMA Retirement Corporation, All Rights Reserved. This information is intended for educational purposes only and is not to be construed as investment advice or a solicitation to buy or sell securities. Investors should seek financial advice regarding the appropriateness of investing in any securities or investment strategies discussed here. Past performance is not necessarily indicative of future performance.

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