According to the World Bureau of Metal Statistics, the global aluminum market was in oversupply by some 1.23 million tonnes in the first nine months of 2013, following a surplus of 539,000 tonnes for the whole of 2012. It’s this quantity of metal above ground which drove prices this week to their lowest value since mid-2009.
The dollar slid 0.2 percent to $1.3803 per euro at 6:57 a.m. New York time after reaching $1.3822, the weakest since November 2011. It declined 0.1 percent to ¥97.33 after touching ¥97.16 yesterday, the lowest level since Oct. 9. Europe’s shared currency rose 0.2 percent to ¥134.37.
The price of crude oil has slumped 1.6% to under $97 per barrel this morning, while copper is down 1.9% and most agricultural commodities are lower. Even natural gas is taking a hit: its price is down by 1.7% to $3.90 this morning.
The Standard & Poor’s GSCI Index of 24 raw materials lost as much as 2 percent to 622.91, the biggest intraday loss since May 10, before reaching 625.31 as of 1:41 p.m. in London.
The US dollar soared against major currencies on Friday on growing speculation that the Federal Reserve could soon begin to rein in its bond-buying program and after data showed US consumer sentiment hit a 6-year high in early May.
The US Dollar Index is very strong right now: at its highest value since July 2010, closing at 84.24 on Friday.
The Dollar Index, Intercontinental Exchange Inc.’s benchmark that tracks the greenback against the currencies of six major U.S. trading partners, reached its highest level since Aug. 3. It added 0.5 percent to 82.715. The weekly gains streak was the longest since the five days ended June 1.
The dollar is “holding its own at a time when equities are doing quite well and risk appetite is firming,” Richard Franulovich, senior currency strategist at Westpac Banking Corp. in New York, said in telephone interview. “It’s a potentially momentous correlation shift, whereby the dollar is now a growth currency.”
The Chinese government has agreed to loosen controls somewhat on the yuan and let it fluctuate more widely. As a result, Chinese goods may become more expensive, especially if growth in the yuan’s value accelerates, Purchasers need to keep a close eye on the Chinese currency, and would be well advised to consider looking elsewhere for cheap products. if it starts rising sharply.
Against a basket of currencies, the dollar has lost almost 18% since last June and more than 10% since December, raising the concern that panic selling has already set into foreign exchange trade. The U.S. dollar index fell to 72.933 on April 29, nearing the all-time low of 71.329 set during the financial crisis in 2008.
It is almost becoming an affront to the legacy of George Washington to have to grace the lowly greenback.
While the currency managed to claw back some ground amid turmoil on global markets this week, it remains on the verge of sinking below a pair of important thresholds. The first is the 2008 record low.
But perhaps an even greater indictment of the U.S. dollar is its depreciation against the euro, a currency that’s one sovereign default away from an existential crisis. At US$1.50, the euro will have climbed all the way back from last year’s plunge.
April 28 (Bloomberg) — The Dollar Index, which tracks the dollar against the currencies of six major U.S. trading partners, dropped to 73.013 as of 8:50 a.m. in London from 73.519 in New York yesterday, after touching 72.871, the least since July 2008. The dollar declined to $1.4851 per euro from $1.4788 after sliding to $1.4882, the weakest since Dec. 7, 2009.
The Australian dollar climbed to a record against its U.S. counterpart amid speculation the South Pacific nation will raise rates to contain inflation. The U.S. currency depreciated versus 13 of its 16 most-actively traded peers and fell to its weakest level against the euro in more than 16 months. The yen appreciated versus most other major currencies after a report showed Japanese investors sold foreign assets last week.
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