Breaking News

The USD And Commodities

By IFC MarketsForexMay 05, 2014 09:50AM ET
The USD And Commodities
By IFC Markets   |  May 05, 2014 09:50AM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items

There were strong price fluctuations observed on Friday, but the US Dollar Index was almost unchanged by the results of the day. The U.S. economic data proved to be very positive and moderately negative.

The unemployment rate fell in April to a minimum of 5.5 years and amounted to 6.3%. Jobs in the agricultural sector (Nonfarm payrolls) appeared to be at their maximum in January 2012 and amounted to 288 thousand people. This has caused a short-term growth in the U.S. Dollar index. The good data like that are still not able to reverse the trend upwards because of the second component of the day, such as increase in industrial orders for March that turned out much weaker than expected and was only 1.1%. In general, investors are still pessimistic about the U.S. currency. Only 7% of economists expect the growth in U.S. interest rates this year. Nevertheless, investor perceptions about the U.S. Dollar are gradually changing for the better. According to the latest CFTC report, the net short on the U.S.Dollar fell to $686 million from $1.58B a week earlier. Today at 14-00 CET, we will see the business activity index in the service sector (ISM) for April. The outlook is positive.


Note that the 3-month volatility index from Deutsche Bank, which is calculated on the basis of nine major currency pairs, began to rise slightly from its lowest level since July 2007. This could mean stronger price fluctuations or even a new trend formation.
The Australian Dollar (AUD/USD) showed a slight weakening. It looks like a price decrease. The Australian property market data for March were weak. Since the number of new building permits was declined. An additional negative factor was the lowering in Chinese (PMI) from HSBC for April to 48.1 points which is more significant than expected. China is a major buyer of raw materials from Australia. Note that if the PMI is below 50, it means a production decline. The official index value for April is also 50.4 points, which is much higher than the independent indicator of HSBC. The Australian Dollar Movement was not too strong in anticipation of tomorrow's RBA meeting and its press conference at 3-30 CET.


Lowering in the business activity index (PMI) in China from HSBC in April contributed to the Japanese Yen (USD/JPY) strengthening and had a negative impact on the bunch of commodity futures. The BOJ President, Haruhiko Kuroda said that the Japanese economy is on a recovery path. Market participants decided that it reduces the likelihood of increasing the monetary emission volume in the near future. Japanese financial markets are closed for today and tomorrow because of the holiday.

The (London Wheat) increased to a maximum of 11 months. Consumers fear the yield decrease due to possible drought in the United States. The temperature in the southern Great Plains rose to 32,2-37,8 degrees Celsius. The second factor was the unrest in Odessa Ukraine, where more than forty died. Market participants do not rule out disruptions in the Ukrainian wheat export via sea shipments. Odessa carries about 87% of wheat exports. The remaining food futures got cheaper because of possible Chinese economic slowdown and the lower PMI.

The Copper has risen to its 8 weeks maximum. According to the CFTC, market participants have formed the Copper net long for the first time. The premium between the prices per ton on the Chinese physical and futures markets reached its highest level of three years and was $250 (1570 yuan).

The USD And Commodities
The USD And Commodities

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind: 

  • Enrich the conversation
  • Stay focused and on track. Only post material that’s relevant to the topic being discussed.
  • Be respectful. Even negative opinions can be framed positively and diplomatically.
  •  Use standard writing style. Include punctuation and upper and lower cases.
  • NOTE: Spam and/or promotional messages and links within a comment will be removed
  • Avoid profanity, slander or personal attacks directed at an author or another user.
  • Don’t Monopolize the Conversation. We appreciate passion and conviction, but we also believe strongly in giving everyone a chance to air their thoughts. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Are you sure you want to delete this chart?
Write your thoughts here
Replace the attached chart with a new chart ?
Post also to:
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
Are you sure you want to delete this chart?
Replace the attached chart with a new chart ?
Post 1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Disclaimer: Fulfilling trading operations under conditions of significant leverage, or relatively little changes of the rate of financial tool (currency pair, index, etc.) can cause significant changes to the customer trading account (proportionally to this leverage) . At movement of the market against the customer position he can incur significant loss of part or the whole deposit. The customer is fully responsible for using his financial resources and choosing the trading strategy. Many financial tools have high volatility and/or have significant intraday time ranges of price changes that define high probability of reception of both fast profits and losses from trading operations.
Continue with Google
Sign up with Email