The current episode of dollar weakness has not sparked a rally in commodities as it usually happens, at least not yet. As you can see below, the correlation between the dollar and the commodities index is high and inverse, since most commodities are expressed and traded in USD, it is logical to expect price appreciation when the dollar weakens. And it may happen soon. There may be a lag as it happened in 2016, and also as #brics countries are readying a gold back currency to trade oil and other commodities away from the dollar, that may affect the relationship, but the impact should be limited at the beggining. The real question is if the dollar weakness is fundamentally justified and it’s sustainable, in an context where US monetary policy is still hawkish. And the answer (or one of them) may be related to the liquidity in the global system. If it remains high, we may continue to see some weakness.
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