{"paper_id":"085d40df-fa3a-4b02-ba61-b804c7accec0","body_text":"From Oil to Sterling: How Commodity Equity Signals Stabilize Currency Volatility in a Post-Crisis Economy | Research Square window.SnipcartSettings = { analytics: { enabled: false } }; (function() { var accessVector = localStorage.getItem('access_vector') || ''; window.dataLayer = window.dataLayer || []; if (accessVector) { window.dataLayer.push({ user: { profile: { profileInfo: { snid: accessVector } } } }); } })(); (function(w,d,s,l,i){w[l]=w[l]||[];w[l].push({'gtm.start':new Date().getTime(),event:'gtm.js'});var f=d.getElementsByTagName(s)[0],j=d.createElement(s),dl=l!='dataLayer'?'&l='+l:'';j.async=true;j.src='https://www.googletagmanager.com/gtm.js?id='+i+dl;f.parentNode.insertBefore(j,f);})(window,document,'script','dataLayer','GTM-K279D39R'); Browse Preprints In Review Journals COVID-19 Preprints AJE Video Bytes Research Tools Research Promotion AJE Professional Editing AJE Rubriq About Preprint Platform In Review Editorial Policies Our Team Advisory Board Help Center Sign In Submit a Preprint Cite Share Download PDF Research Article From Oil to Sterling: How Commodity Equity Signals Stabilize Currency Volatility in a Post-Crisis Economy Houssam BOUGHABI This is a preprint; it has not been peer reviewed by a journal. https://doi.org/ 10.21203/rs.3.rs-7466683/v1 This work is licensed under a CC BY 4.0 License Status: Posted Version 1 posted You are reading this latest preprint version Abstract This paper develops a stochastic model to examine how oil-linked equity prices influence the volatility of the British pound in the aftermath of the 2008 financial crisis. Drawing on behavioral macroeconomic insights and post-crisis empirical data, the study identifies a forward-looking feedback loop whereby oil sector valuations amplify or stabilize currency fluctuations through expectations-driven dynamics. Using a discrete-time stochastic process, we find that oil-related stocks function as automatic stabilizers by internalizing external shocks and moderating exchange rate volatility. These findings bridge the gap between commodity-currency literature and Keynesian macro-financial theory, demonstrating the potential of sector-specific financial instruments to mitigate instability under conditions of uncertainty and hysteresis. JEL Classification. F31, G12, Q43, D84 Macroeconomics Currency volatility Oil stock prices Keynesian feedback Financial crisis Behavioral macroeconomics Full Text Additional Declarations The authors declare no competing interests. Supplementary Files Code.docx The Model Python Code Cite Share Download PDF Status: Posted Version 1 posted You are reading this latest preprint version Research Square lets you share your work early, gain feedback from the community, and start making changes to your manuscript prior to peer review in a journal. As a division of Research Square Company, we’re committed to making research communication faster, fairer, and more useful. We do this by developing innovative software and high quality services for the global research community. Our growing team is made up of researchers and industry professionals working together to solve the most critical problems facing scientific publishing. Also discoverable on Platform About Our Team In Review Editorial Policies Advisory Board Help Center Resources Author Services Accessibility API Access RSS feed Manage Cookie Preferences © Research Square 2026 | ISSN 2693-5015 (online) Privacy Policy Terms of Service Do Not Sell My Personal Information {\"props\":{\"pageProps\":{\"initialData\":{\"identity\":\"rs-7466683\",\"acceptedTermsAndConditions\":true,\"allowDirectSubmit\":true,\"archivedVersions\":[],\"articleType\":\"Research Article\",\"associatedPublications\":[],\"authors\":[{\"id\":506082703,\"identity\":\"3da653e8-94fe-4288-acb8-cf95d5a14ad9\",\"order_by\":0,\"name\":\"Houssam BOUGHABI\",\"email\":\"data:image/png;base64,iVBORw0KGgoAAAANSUhEUgAAAZAAAAAyAQMAAABI0h/eAAAABlBMVEX///8AAABVwtN+AAAACXBIWXMAAA7EAAAOxAGVKw4bAAAA9ElEQVRIiWNgGAWjYBACAwYeEHWAwYCZ+cABUrWwJZCqhYHHgDiHmTPwHnzM8+uOvDk7z8fDBX9s5BnYDz9gulGDW4tlA1+yMW/fM8OdzbwbDs9sSzNs4EkzYM45hsdhB3jMpHl7DjNuOAzUwttwmLGBIYeBOYeNsBb7DYd5Hhzm+fPfvoH/DVDLPwJaeH4cTgRqYTjMw3YgsUECaEtuGx4th/mSDec2HE7e2cxmcJi3LTm5TeKZweHcPjxajvcefPDmz2Hb7fyHH3/m+WNn28+f/PBxzjfcWhiYgZgR2Rkgjx/AowEK/hBWMgpGwSgYBSMYAABudFObf+hDdwAAAABJRU5ErkJggg==\",\"orcid\":\"https://orcid.org/0009-0005-3492-1910\",\"institution\":\"National Institute of Statistics and Applied Economics\",\"correspondingAuthor\":true,\"prefix\":\"\",\"firstName\":\"Houssam\",\"middleName\":\"\",\"lastName\":\"BOUGHABI\",\"suffix\":\"\"}],\"badges\":[],\"createdAt\":\"2025-08-27 00:58:31\",\"currentVersionCode\":1,\"declarations\":{\"humanSubjects\":false,\"vertebrateSubjects\":false,\"conflictsOfInterestStatement\":false,\"humanSubjectEthicalGuidelines\":false,\"humanSubjectConsent\":false,\"humanSubjectClinicalTrial\":false,\"humanSubjectCaseReport\":false,\"vertebrateSubjectEthicalGuidelines\":false},\"doi\":\"10.21203/rs.3.rs-7466683/v1\",\"doiUrl\":\"https://doi.org/10.21203/rs.3.rs-7466683/v1\",\"draftVersion\":[],\"editorialEvents\":[],\"editorialNote\":\"\",\"failedWorkflow\":false,\"files\":[{\"id\":90283982,\"identity\":\"f8581efb-f834-4fcb-ab88-3dad002b7123\",\"added_by\":\"auto\",\"created_at\":\"2025-09-01 05:44:29\",\"extension\":\"pdf\",\"order_by\":1,\"title\":\"\",\"display\":\"\",\"copyAsset\":false,\"role\":\"manuscript-pdf\",\"size\":363559,\"visible\":true,\"origin\":\"\",\"legend\":\"\",\"description\":\"\",\"filename\":\"Article6.pdf\",\"url\":\"https://assets-eu.researchsquare.com/files/rs-7466683/v1_covered_86dbfb08-f99a-4d2e-95c5-27a373f03c44.pdf\"},{\"id\":90283576,\"identity\":\"15d1f665-c43b-4e24-8e98-10a44e07e3b0\",\"added_by\":\"auto\",\"created_at\":\"2025-09-01 05:36:26\",\"extension\":\"docx\",\"order_by\":1,\"title\":\"\",\"display\":\"\",\"copyAsset\":false,\"role\":\"supplement\",\"size\":19089,\"visible\":true,\"origin\":\"\",\"legend\":\"\\u003cp\\u003eThe Model Python Code\\u003c/p\\u003e\",\"description\":\"\",\"filename\":\"Code.docx\",\"url\":\"https://assets-eu.researchsquare.com/files/rs-7466683/v1/61ecce1829637c95060158da.docx\"}],\"financialInterests\":\"The authors declare no competing interests.\",\"formattedTitle\":\"\\u003cp\\u003eFrom Oil to Sterling: How Commodity Equity Signals Stabilize Currency Volatility in a Post-Crisis Economy\\u003c/p\\u003e\",\"fulltext\":[],\"fulltextSource\":\"\",\"fullText\":\"\",\"funders\":[],\"hasAdminPriorityOnWorkflow\":false,\"hasManuscriptDocX\":false,\"hasOptedInToPreprint\":true,\"hasPassedJournalQc\":\"\",\"hasAnyPriority\":true,\"hideJournal\":true,\"highlight\":\"\",\"institution\":\"\",\"isAcceptedByJournal\":false,\"isAuthorSuppliedPdf\":true,\"isDeskRejected\":\"\",\"isHiddenFromSearch\":false,\"isInQc\":false,\"isInWorkflow\":false,\"isPdf\":true,\"isPdfUpToDate\":true,\"isWithdrawnOrRetracted\":false,\"journal\":{\"display\":true,\"email\":\"info@researchsquare.com\",\"identity\":\"researchsquare\",\"isNatureJournal\":false,\"hasQc\":true,\"allowDirectSubmit\":true,\"externalIdentity\":\"\",\"sideBox\":\"\",\"snPcode\":\"\",\"submissionUrl\":\"/submission\",\"title\":\"Research Square\",\"twitterHandle\":\"researchsquare\",\"acdcEnabled\":true,\"dfaEnabled\":false,\"editorialSystem\":\"\",\"reportingPortfolio\":\"\",\"inReviewEnabled\":false,\"inReviewRevisionsEnabled\":true},\"keywords\":\"Currency volatility, Oil stock prices, Keynesian feedback, Financial crisis, Behavioral macroeconomics\",\"lastPublishedDoi\":\"10.21203/rs.3.rs-7466683/v1\",\"lastPublishedDoiUrl\":\"https://doi.org/10.21203/rs.3.rs-7466683/v1\",\"license\":{\"name\":\"CC BY 4.0\",\"url\":\"https://creativecommons.org/licenses/by/4.0/\"},\"manuscriptAbstract\":\"\\u003cp\\u003eThis paper develops a stochastic model to examine how oil-linked equity prices influence the volatility of the British pound in the aftermath of the 2008 financial crisis. 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