The lower oil prices can have an impact on the currency markets. Historically the FX market used to trade the oil spread (gbp/yen) on oil price movements. The market used trade FX accordingly on oil movements. to buy yen when oil was weak and vice versa given the fact that Japan imported 100% of its energy needs. Back then the UK was considered an oil producer and the British Pound would move in line with rise/fall in oil prices. The Yenâs personality has changed in recent quarters as the âcarry tradeâ theme is overriding its former relationship to oil price movements. Yen is soft against all major crosses as yield outweighs oil prices. However, The Canadian Dollar (C$) is currently a better currency pair to use in unison with oil price movements. The oil sands of Canada made the oil commodity a higher weighting in terms of tracking the Canadian Dollar price movements. The high price spike in crude near $80 last year positively corresponded with the high in the C$ against numerous currency pairs. This pair is making fresh nine month highs as oil dips below $55.00 per barrel. copyright 2007 Trade The News