{"id":54334,"date":"2008-06-12T11:38:22","date_gmt":"2008-06-12T01:38:22","guid":{"rendered":"http:\/\/www.fnarena.com\/index.php\/2008\/06\/12\/stronger-us-dollar-to-weigh-on-commodity-prices\/"},"modified":"2008-06-12T11:38:22","modified_gmt":"2008-06-12T01:38:22","slug":"stronger-us-dollar-to-weigh-on-commodity-prices","status":"publish","type":"post","link":"https:\/\/staging.fnarena.com\/index.php\/2008\/06\/12\/stronger-us-dollar-to-weigh-on-commodity-prices\/","title":{"rendered":"Stronger US Dollar To Weigh On Commodity Prices"},"content":{"rendered":"<p>  <title>anz-commod12-6<\/title><\/p>\n<p>By Chris Shaw<\/p>\n<p>Oil prices rose overnight but trading in recent sessions has become<br \/>\nquite choppy in a trend ANZ Banking Group senior commodity strategist<br \/>\nMark Pervan expects will continue, particularly as the weekly numbers<br \/>\nfrom the US Department of Energy gave mixed signals as to the market&#8217;s<br \/>\noutlook.<\/p>\n<p>Shorter-term Pervan suggests much will depend on the direction of the<br \/>\nUS dollar, as if the currency were to strengthen he sees scope for some<br \/>\nprofit taking in the oil market given the early indications are for a<br \/>\nweak driving season in the US and as there are no signs yet of any<br \/>\nhurricane activity in the Gulf of Mexico.<\/p>\n<p>Over the next few months Pervan expects prices will continue to ease<br \/>\ngiven weaker demand from&nbsp;the US and potentially from the rest<br \/>\nof the world, though with Chinese demand likely to remain strong he<br \/>\nsuggests the&nbsp;downside&nbsp;is somewhat limited.<\/p>\n<p>Gold may find the going tougher given potential for profit taking in<br \/>\nthe oil market and a stronger US dollar, which Pervan notes is gaining<br \/>\nsupport from increased expectations interest rates in the US will move<br \/>\nup as inflation increasingly becomes an issue.<\/p>\n<p>Medium-term the outlook for gold is similar to that of oil in Pervan&#8217;s<br \/>\nview as he expects the price of the metal will drift lower in coming<br \/>\nmonths as the US dollar finds a bottom and as any signs of stability in<br \/>\nequity markets reduce gold&#8217;s attraction as a safe haven.<\/p>\n<p>If prices become less volatile he expects trade buying of the metal<br \/>\nwill also increase, which in conjunction with modest central bank sales<br \/>\nshould act to limit the extent of any falls.<\/p>\n<p>The recent strength in oil prices has weighed on demand for base metals<br \/>\nand with continued signs Chinese demand is slowing Pervan sees scope<br \/>\nfor further falls in the short-term, especially if traders using base<br \/>\nmetals as a US dollar hedge get spooked by the prospect of intervention<br \/>\ndesigned to lift the greenback.<\/p>\n<p>Pervan expects prices across the sector to be choppy in coming months<br \/>\nwith nickel the best bet given LME supplies of the metal have fallen<br \/>\nover the past three weeks and with scope for the disruption to gas<br \/>\nsupplies in Western Australia to further limit output. As well, he<br \/>\nsuggests aluminium could gain if oil prices remain elevated.<\/p>\n<p>Coal prices may see some profit taking if oil falls in coming sessions,<br \/>\nwhile Pervan also notes a return to normal operating conditions at the<br \/>\nNewcastle port may act as a trigger for traders to take some money off<br \/>\nthe table.<\/p>\n<p>With oil tipped to fall in coming months Pervan sees coal prices also<br \/>\neasing, though again&nbsp;he doesn&#8217;t expect prices will fall<br \/>\nsignificantly as infrastructure constraints in Australia in particular<br \/>\nwill contain&nbsp;any downside by limiting supply at a time when<br \/>\nAsian demand remains strong. <\/p>\n<p>While not expected upside to coal prices in coming months is a<br \/>\npossibility given the combination of switching from higher quality<br \/>\nthermal coal into higher priced semi-soft coal and slowing export<br \/>\nvolumes from both South Africa and Vietman.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>ANZ Bank suggests signs the US dollar is bottoming implies commodity prices may trend lower in the short and medium-term. Any falls are believed unlikely to be significant.<\/p>\n","protected":false},"author":9,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[59],"tags":[23,89,24,88,22],"acf":[],"_links":{"self":[{"href":"https:\/\/staging.fnarena.com\/index.php\/wp-json\/wp\/v2\/posts\/54334"}],"collection":[{"href":"https:\/\/staging.fnarena.com\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/staging.fnarena.com\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/staging.fnarena.com\/index.php\/wp-json\/wp\/v2\/users\/9"}],"replies":[{"embeddable":true,"href":"https:\/\/staging.fnarena.com\/index.php\/wp-json\/wp\/v2\/comments?post=54334"}],"version-history":[{"count":0,"href":"https:\/\/staging.fnarena.com\/index.php\/wp-json\/wp\/v2\/posts\/54334\/revisions"}],"wp:attachment":[{"href":"https:\/\/staging.fnarena.com\/index.php\/wp-json\/wp\/v2\/media?parent=54334"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/staging.fnarena.com\/index.php\/wp-json\/wp\/v2\/categories?post=54334"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/staging.fnarena.com\/index.php\/wp-json\/wp\/v2\/tags?post=54334"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}