Oil prices in currencies other than the USD

I've received a request to update my irregular series of graphs of movements in oil prices in currencies other than the USD. There's been a certain amount of movement in the oil and forex markets over the past few months, so I'm happy to oblige:

The CAD and the euro have appreciated by about 20% with respect to the USD and the yen since February. And inflation is below target in both Canada and the euro area. So it may not be a coincidence that Willem Buiter's recommendation to the ECB looks a lot like my recommendation to the Bank of Canada.

Comments

[Kosta]

Thanks for the chart, I love these comparisons. And while I agree with you that a strengthening Loonie is deflationary (or at least I did agree), there's a problem with the line of argument comparing the relative strength of the USD, Yen, Euro and CAD, and correlating that strength to inflation being below target. The argument breaks down with the implication that Canadian and European inflation rates are below target in part because of the strength of CAD and the Euro.

If I am not mistaken, inflation levels are even lower in Japan and the US than they are in Canada and Europe. If lowering the value of the currency promotes inflation, should not inflation be increasing in Japan and the US more rapidly than in Canada and Europe? Instead we are seeing the reverse. Perhaps the relative strength of CAD and the Euro mere reflective of the higher inflation rates in those two currency areas?

[Two Hats]

Hi Stephen,

What price of oil are you using for your dataset? I ask because I've started my own database of oil prices (eventually I hope to put it on-line), and struggled with what specific measure to use as standard. I settled on the monthly average NYMEX Contract 1 price for light sweet crude delivered to Cushing, Oklahoma (see http://tonto.eia.doe.gov/dnav/pet/pet_pri_fut_s1_m.htm ) and would appreciate your comments on this.

BTW, I'm tracking the same thing for gold. I find it odd that our financial papers never report commodity prices in CAD, not just in stat reports -- I realise the US price is needed because it's the actual price -- but also in feature pieces where some reference to what those prices mean for local buyers/sellers/investors is appropriate.

[Stephen Gordon]

I use the daily spot prices from the EIA site:

http://tonto.eia.doe.gov/dnav/pet/pet_pri_spt_s1_d.htm