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Oil Will Replace Dollar as Reserve Currency

Crude oil has replaced the dollar as the new reserve currency, according to Kevin Kerr, president & chief trading officer for Kerr Trading International.

"(The) dollar is the big driver for oil right now ... You will see them move inversely and you will see it before the end of the year," Kerr told CNBC.

"We are going to see unwinding of the dollar positions; we are going to see unwinding of the gold positions; positions squaring before the end of the year," he explained.

In the near term, Kerr expects oil prices to pull back and the dollar to strengthen further before the year-end.

"I'm long-term bullish on the commodities," he said, adding that he expects agricultural commodities and gold to do well going forward.

"But short term, there may be some short downside on some of these commodities."

The sell-off in commodities will support dollar prices, Kerr said, but added that he is very bearish on the outlook for dollar.