A stronger US Dollar Index takes the shine off oil prices, commodities

3 October 2011 3 October 2011

BonTrade

Recent strength in the dollar, as seen by the US Dollar Index which is hovering back near the 80 level is helping to take a shine off oil prices, gold and other commodities as investors continue to flee for their favourite safe haven, the greenback.

Latest US Dollar Index Rate

The ICE US Dollar Index, which tracks dollar strength against six major world currencies was recently at 79.695 in trading this afternoon from Friday’s close of 79.075.

Dollar Strength is Back

Although the US Dollar Index was down 1.5 percent year to date through to 28th September, it is showing signs of getting stronger as fears of global economic strife and political unrest spread.

“We start the week looking towards further potential US dollar strength across the board.” commented OCBC Bank strategists.

On the first day of the new trading month, with the US dollar enjoying further gains against all major currencies. Once again it is Europe’s inability to agree a strategy for combating its increasingly desperate sovereign debt and banking crisis which is contributing to the dollar’s allure.

“The dollar is and has been the prettiest girl at an ugly dance. Long term, I see the dollar and euro trading equal.” said Paul Schatz, president of Heritage Capital.

“The dollar is a safe haven, regardless of what S&P says, and the dollar has started to break out versus all other currencies.” said Matthew Claassen, president of Claassen Research.

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