The US dollar keeps on appreciating and easily overcoming every test on its way up. Last week, the dollar index registered an 11-year high. We haven’t seen the dollar this strong since 2003.
If you remember, this is a phenomenon we noticed in September, when we pointed out that the dollar was ready for a run and that commodities and, therefore industrial metals, would take the hit.
This is exactly what we see now and the story is certainly continuing.
Commodities finally gave in and are now at their lowest levels since 2009. Why wouldn’t they be? They might even fall below 2009 levels. Crude oil was the first commodity to plunge and recently copper followed. The weakness has already spread to industrial metals and nothing indicates the worst of it is over.
What This Means For Metal Buyers
Foreign currencies are depreciating heavily against a strong dollar. Commodities are falling as crude oil and copper plunge. Is there anything positive to come from the dollar’s rise? Sure, there’s no reason to expect your raw material costs will be higher this year.