July 27, 2020, 11:46 am EDT
Falling Dollar and Rising Commodity
While the US dollar keeps plunging to new local low, commodity prices are rising steadfastly across various materials.
- Precious Metal: NEM +4%
- Chemical: DOW +4%, EMN +2%
- Basic Material: FCX +4%
- Agriculture: MOS, CF +2%
It makes sense to add material into the portfolio because of the falling dollar. Money printing policies from the Fed and US government, including stimulus, buying corporate bonds, and lower interest rates, are major reasons to drive the dollar lower in order to deal with weak economic activities due to virus shutdown. If this situation continues, the US dollar has to go lower for an extended period of time. This force will carry commodity prices higher.