Commodities strengthened broadly as the dollar sank against most major currencies, with observers wondering whether a dollar rally since November will last.
The ICE U.S. Dollar Index was off 0.2% at 78.05, though the dollar appreciated against the Euro to $1.438.
Bloomberg and FT take on the bull and bear dollar positions, with Bloomberg quoting currency strategist Marc Chandler at Brown Brothers Harriman saying the dollar’s rise against the yen and the Euro today is a “head fake,” with dollar bears simply taking some money off the table. FT quotes Lee Hardman with Bank of Tokyo saying improving economic factors will cause dollar outperformance against most major currencies in 2010.
Light sweet crude futures for delivery in February rose 62 cents to $78.67 per barrel. Gold futures for delivery in January rose $3.40 to $1,107.50 per ounce.
Looking back on last week’s action, soft commodities have risen to multi-decade highs, FT’s Javier Blas reported yesterday, driven by bad weather and shortages of coffee, cocoa, sugar, and other staples.
Cocoa was at a 31-year high today, while sugar hit its highest levels in more than 28 years.
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