Officials Deny UK Independent Report

Officials denied the Independent's report (see my yesterday's post) that the Gulf states, along with China, Japan, Russia and France, will phase out the pricing of oil in US dollars over the next 9 years and substitute with the basket of currencies and gold.

Officials deny UK media report on move from dollar
(10/6/09 AP via Yahoo Finance)

"LONDON (AP) -- The dollar fell Tuesday towards year lows against the euro and the yen after a report that Arab states and other countries were contemplating an end to the U.S. currency's role in the pricing oil.

"The selling was stoked by an article in Britain's "Independent" newspaper that said secret meetings were taking place between Arab states, China, Russia, Japan and France, to end dollar dealings for oil and moving instead to a basket of currencies, including the euro, the yen and the Chinese yuan.

"Officials in several of the countries either denied talks or said they had no knowledge."

"Kuwait's oil minister, Sheik Ahmed Al Abdullah Al Sabah, said there have been no talks on the topic among Gulf oil ministers. "At our level, no," he said. "I didn't even dream about it."

"And the head of the United Arab Emirates' central bank, Sultan Nasser al-Suweidi, said the Gulf nation has no plans to stop pricing oil in dollars. "There has been no meeting ... whatsoever," he told The Associated Press, adding that the dollar "will continue as the price for oil.""

"At our level"? That's interesting.

The Independent's story could be false, although Robert Fisk is a highly respected journalist.

Regardless, U.S. dollar took the beating overnight in London, and the weakness continues in the U.S. forex market. The U.S. dollar index (DXY) now stands at 76.33 at 1:59 PM EST, recovering from the day's low at 76.103 after the London forex went offline at 12:00PM EST. Right now, only New York is open for forex trading.

We will find out how Sydney and Tokyo treat U.S. dollar when they come online at 5:00 PM EST and 7:00 PM EST respectively.

In the meantime, gold shot up $26 to a new high of $1,043. It's currently trading at $1,036, on the recovering US dollar.

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