The International Energy Agency said stockpiles of oil stand at a record 3 billion barrels. Indeed, oil prices returned to their August lows, losing some 8% as the entire commodity spectrum came under pressure. These are certainly interesting times. Although the USD is the global reserve currency, the US economy is quite insular (exports contribute only around 13% of GDP). As such, the FED is focused on their domestic economy, which is expanding at a reasonable pace, somewhat out of sync with broader global weakness. This could continue to perpetuate USD strength.
Key questions for investors are therefore whether non-USD liquidity (for example from the ECB) can make up for US tightening and whether current exchange rates already fully reflect impending rate hikes.