Title: The Inverse Relationship Between the Dollar and Commodities
Headings: How the Dollar Impacts Commodity Prices
Assets & Markets Commodities
How the Dollar Impacts Commodity Prices
The General Rules Might Be Changing
Key Takeaways
Why the Movement?
Commodities Are Global Assets
The Dollar Is the Benchmark Because It's Stable
The Effect on Commodities
Is Change in the Air?
Monitoring the Dollar

Content: When the value of the dollar drops, they have more buying power because it requires less of their currencies to purchase each dollar. Classic economics teaches that demand typically increases as prices drop. The Dollar Is the Benchmark Because It's Stable
Commodities don't trade in a vacuum. Commodity production is often a localized affair. The majority of corn and soybean production in the world comes from the fertile lands of the U.S. The mineral-rich soil of Chile yields the largest output of copper on earth, and half the world’s oil reserves are located in the Middle East. The largest producers of cocoa beans are in Africa in the Ivory Coast and Ghana regions. As you can see, commodity production depends on climate and geology in specific locations. But the people and companies that want these important raw materials are located all over the globe. The vast majority of these materials use the dollar as a pricing mechanism for global trade because of the United States' strong, stable economy. When the dollar strengthens, it means that commodities become more expensive in other, nondollar currencies.