I keep listening to those reporters on TV and even some economists, politicians and fund managers insisting that the plunging dollar is the cause for the rise in oil prices. Jesus! It's the other way around. Those people cannot separate cause and effect. Oil prices rise due to high demand and limited production/capacity. Buyers of oil keep selling dollars forward to secure their price in local currency. If oil drops, the dollar will go up.
The boomerang effect is a lower dollar when stock market in the US rises, almost tick by tick sometimes. Foreign buyers of US stocks sell dollars forward when oil prices rise to hedge currency exchange risk.
The answer is for world governments to flood the market with reserves. Not to blame the dollar for their inability to solve the problem. There is nothing wrong with the dollar other than oil is priced in dollars. If oil starts being priced in euros also, euro will go down too.
Interesting idea. I am of another line of thought, however. I think the big hedge fund game is to sell dollars against buying treasuries. Thats a US asset neutral position effectively short dollar price.
And a levered trade at that everyone is on the same side of. December 11th should be the near term peak of oil.