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Are electricity prices affected by the US dollar to Euro exchange rate?

April 26, 2017affected dollar electricity Euro exchange rate prices

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Are electricity prices affected by the US dollar to Euro exchange rate?

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M. Pilar Muñoz and David A. Dickey Energy Economics, 2009, vol. 31, issue 6, pages 857-866 Abstract: The objective of this paper is to investigate the relationships between Spanish electricity spot prices and the US dollar/Euro (USD/Euro) exchange rate during the period 2005-2007, taking into account the study of the association between dollar and oil prices, in order to better understand the evolution of the former over time. The first finding in this study is that Spanish electricity spots prices, the USD/Euro exchange rate and oil prices are cointegrated; therefore there is a long-run equilibrium relationship between the three variables. Short-run relationships have been detected between oil prices and Spanish electricity prices and USD/Euro exchange rate in the sense that Spanish electricity prices and USD/Euro exchange rate are affected by oil prices in the short run. There is a transmission of volatility between USD/Euro exchange rate and oil prices to Spanish electricity prices;