Typically people associate a strong dollar with weak commodities and vice versa because that is what they are priced in, and a falling dollar makes it cheaper globally. But if there is a supply shortage that pushes up commodities, would that specifically weaken the dollar? The only thing I can think of is that the US is an import driven economy, so the rising prices would apply pressure, but so are many other developed nations. Basically, the dollar affects commodities, but does commodities specifically affect the dollar?
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$\begingroup$ The dollar is currently at a long time high against EUR for example (the two major currencies). Yet, many commodities are also at an all time high. FX is essentially a random walk (and no forecast or model beats it, see for example this question $\endgroup$– AlexJun 13, 2022 at 5:12
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1$\begingroup$ Also, as for example this CNBC article, based on Citi research, points out, the presumed relationship is very weak and not consistent over time. $\endgroup$– AlexJun 13, 2022 at 10:31
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