Tag Archives: US Dollar

Happy Valentine’s Day: Cocoa Hits Lowest Since 2008

If you buy a little extra chocolate this year for your Valentine, your wallet will be as happy as your sweetheart.  The S&P GSCI Cocoa is at its lowest level (closing Feb. 10, 2017) since Nov. 13, 2008.  It is down 31.3% since last year and is the single commodity with the biggest loss in Read more […]

Industrial Metals On Pace For Worst Month In 4 Years

While most of the markets have calmed as investors wait for Brexit and the Fed rate decision, industrial metals are crashing. The S&P GSCI Industrial Metals Total Return is down 8.7% month-to date (through May 23, 2016,) and on pace to record its worst month since May 2012, when it lost 9.7%. At this rate, the Read more […]

Metals Don’t Reflect Chinese Demand Growth

After China reported year-over-year first-quarter growth that showed signs of improvement, it overpowered negative news of the Doha oil production meeting failure and sent commodities rallying. Investors’ attention quickly shifted from oil to the other economically sensitive sector, industrial metals. Many believe the uses for metals in construction and automobile manufacturing are the driving force behind the sector. Read more […]

Every Commodity Benefits From A Falling Dollar

For the first time since June 2014, the Dollar Spot Index yoy% was negative in March. That was one of the main reasons commodities had such a strong month with the S&P GSCI gaining 4.9% and Dow Jones Commodity Index (DJCI) up 4.0%. Since commodities are priced in US dollars, when the dollar rises, it Read more […]

Biggest Commodity Comeback Ever

St. Patrick’s Day didn’t just have a pot of gold at the end of the rainbow, but had basically the whole commodity basket. The S&P GSCI that represents the world’s most significant commodities, ended Mar. 17 with a positive total return year-to-date for the first time in 2016, up 1.9%. The index reached its highest level Read more […]

Dollar’s Revival Adds New Life To These Commodities

It makes sense that a strong US dollar is generally bad for commodities since as the U.S dollar strengthens, goods priced in dollars become more expensive for other currencies. However, historically the U.S. dollar has a negative correlation of only about -0.30 with the S&P GSCI as shown in the chart below using data since 1970: This may Read more […]

Fallen Gold May Help India’s Diwali and Monetisation Plan Shine

Could India’s gold obsession be over? The Indian government seems to think so, since they are betting that their people are willing to part with their precious metal to earn just 2.5% interest. Last Thursday, Prime Minister Narendra Modi launched three programmes aimed at reducing physical gold demand and luring tonnes of gold from households into the banking system. That’s Read more […]

A Strong U.S. Dollar Isn’t Bad For All Commodities

A strong US dollar is generally bad news for commodities since historically as the U.S dollar strengthens, goods priced in dollars become more expensive for other currencies. The historical negative relationship between the U.S. dollar and the S&P GSCI is shown below. While the broad based indices are negatively correlated with the U.S. dollar, some commodities are more Read more […]

The Dollar and Returns

The US dollar has strengthened against most other currencies in recent months.  Over the last year the dollar is up 5% against the British pound, 7% versus the Canadian dollar, 8% over the Australian dollar, 9% ahead of the euro and 16% against the yen.  Movements this big shouldn’t be ignored – foreign investors with Read more […]