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Keep an eye on the oil market after Chavez's death

Following the breaking news of Venezuela's president Hugo Chavez, which has no direct impact on the currency market, traders should probably keep an eye on the Oil market. Venezuelan Vice President Mr. Maduro is expected to win the elections and become his successor.

From Reuters: ”We have no doubt that commander Chavez was attacked with this illness,” Maduro said, repeating a charge first made by Chavez himself that the cancer was an attack by “imperialist” foes in the United States in league with domestic enemies.

"This report should be bullish for oil" says Eamonn Sheridan, editor at Forexlive. At the time of writing, US Oil futures are quoted at 90.83 after sharp fall off a double top from early February in the 98.00 vicinity.

Venezuela enjoys the world's largest oil reserves and the oil-related bonds being traded are of enormous size, suggesting that the oil community may go through a phase of hyper-sensitivity on any indications of political unrest in the country.

As Valeria Bednarik, chief analyst at FXstreet.com notes: "Although the news has little to do right now with the forex market, Venezuela is an oil producer, and therefore, we may see some wild action in oil and that could affect forex market." She tips to keep an eye on this and its correlation with oil, "particularly at the European and the US opening" she said.

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