Historically, the Dollar has been negatively correlated with oil prices, meaning low oil prices have coincided with a strong Dollar, while high oil prices have typically come when the Dollar has been weak. We argue that the importance of this empirical relationship is overstated for two reasons. First, many of the counterpart currencies in broad Dollar indices belong to commodity exporting countries, so that falling (rising) oil prices push down (up) their terms of trade, which weakens (strengthens) their currencies. The negative correlation thus exists almost by construction, i.e. is a bit like looking at the ... (full story)