The Dollar Finally Finds Its Feet


Despite the current monetary policy of the Federal Reserve and its chairman Ben Bernanke’s arsenal of dollar-depreciation weapons, it seems that the greenback is making a comeback.

Since the Fed’s implementation of quantitative easing was put into place in 2008, the U.S., for better or for worse, has enjoyed rapid growth and inflation. The falling value of the dollar has in turn made commodity investments one of the hottest areas of growth on a year-over-year basis.

But all good things must come to an end. And after a depressing performance over the last week in U.S. equities and Treasuries, commodities are the next asset class to take a big hit.

WTI crude oil finally fell below the key $100 level in last week’s trading and continued to sink to as low as $95 a barrel much to the chagrin of energy traders and to the delight of automobile-driving consumers.

Even worse than crude has been the performance of precious metals as stop losses get triggered on an intraday basis in gold and silver. Gold has plummeted in value during May, falling to $1,579 an ounce whilst silver dived below $30 to $28.80.

The one oddity, however, is natural gas. The asset class hit a bottom slightly below $2 in late April and soon began a fast rise in the month of May, closing at $2.49 on Friday’s trading. Frozen concentrated orange juice futures also rose on Friday to $123, bucking the trend of the falling buck.

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