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Behind the commodity price boom: the dollar's decline helped!

by:AAG     2020-11-07


the commodity price boom behind: the dollar's decline has been! The rise in commodity prices since June is impressive, although many in the industry is still used to from the change of supply and demand to find the reason, but analyst at Morgan Stanley ( Morgan Stanley) But think, perhaps more or related to a weaker dollar. Quite a few soaring commodity prices over the past few months are between 15 to gain degrees 40% & ndash; — Once let strategist at Morgan Stanley, feel a little confused. On the one hand, although a steady rise in demand for commodities such as iron ore and coal benefit these varieties. At the same time, the 3030 industrial aluminum zinc and nickel market inventory changes can also help to raise prices. If the fundamentals alone, however, is still difficult to explain copper, aluminum, and lead the price rise. To this, analyst at Morgan Stanley, Susan Bates and Tom Price that commodity Price gains may be more driven by external factors: a weaker dollar helped! It is worth mentioning that this is a year, commodity prices and the dollar second obvious relevance, just the opposite direction to last. Will last market commodity prices and the dollar, to the first four weeks after the presidential election last November, when the synchronous rise, and now has evolved into a dollar, commodity prices are rising much! Why the difference? According to Susan Bates and Tom Price point of view, the reason may lie in compared with last November, the current inflation outlook has been reversed. They said: & other; After last year's general election, the market will significantly raise inflation expectations, Intel trump's promise of infrastructure may continue raising prices. 3030 industrial aluminum as the political deadlock in Washington, however, trump's infrastructure plan delay is difficult to make progress, the current U. S. inflation is still below the fed's target of 2%. ” Foreign exchange market's response is that most of the time, in 2017 the dollar has been falling. At the same time, the price of dollar-denominated commodities are benefited from the dollar's decline. Susan Bates and Tom Price, it is pointed out that, along with the middle of June this year the dollar index fell below the area at the base after the election in November, 3030 industrial aluminum it laid the foundation for commodity prices rally, bull then sounded the horn of big north. And in the foreign exchange market, commodity currencies aud will undoubtedly benefit the most, it can not only enjoys a weak dollar, at the same time also can benefit from a rise of base metals. Given as the following this AxiTrader Greg McKenna chart shows, the trend of the Australian dollar this month is closely related to the Shanghai futures exchange metal prices, however, looking to the future, Susan Bates and Tom Price, but from the perspective of seasonal next commodity prices warned the prospect of 3030 industrial aluminium profile. Gradually into the northern hemisphere winter, they point out, usually leads to the production and trade, this will affect the price of raw materials and energy metal requirements. They added that in September and October, companies usually start to reduce purchasing quantity. And in the foreign exchange market, this month cut about trump environmental approval in flood-prone areas, and by the provisions of the limitation of the government investment construction projects, 3030 industrial aluminum filed as he spent $1 trillion part of the plan to solve the problem of the aging infrastructure. Once the market driving factors to assess the impact on the dollar, the current low price rebound could help the dollar stabilises.
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