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, it costs more dollars to buy commodities. At the same time, it costs a lesser amount of other currencies when the dollar is moving lower. Commodities Are Global Assets
Another reason for the influence of the dollar is that commodities are global assets. They trade all over the world. Foreign buyers purchase U.S. commodities such as corn, soybeans, wheat, and oil with dollars. 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.