Oil prices, exchange rates and interest rates

• U.S. real exchange rate fluctuations are not primarily driven by oil market shocks. We quantify the effect of exogenous shocks on price oil. causal interest price. find support for standard model commodity determination. Some implications this robust to allowing additional channels. There has been much in relationship between crude oil, value dollar, and since 1980s. For example, sustained surge 2000s is often attributed declining dollar as well low rates, along with a global economic activity. Quantifying these effects one at time difficult only because close rate, but also demand supply turn may affect rates. propose novel identification strategy disentangling traditional from variation dollar. Our approach exploits combination sign zero restrictions narrative motivated theory extraneous evidence. empirically evaluate popular views about role driving we examine extent which drive evidence first provides direct empirical theoretical models link variables.