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Currency to influence commodities in 2019

A market analyst says the U.S. Dollar could have a big impact on commodity prices this year.

Mike Zuzolo with Global Commodity Analytics tells Brownfield he’ll be watching the value of the dollar relative to Chinese currency during the summer growth season.

“Those are the two that have to work together in my opinion if we’re going to get prices over value and get prices to hit targets that I’m looking for in the 2019 crop year.”

When the dollar falls and the Chinese Yuan rallies, Zuzolo says U.S. agricultural commodities typically strengthen.

“A lower dollar is indicative of inflationary pressure, and I think that brings investors in. And maybe that’s even more important when it comes to a fund-driven commodity rally.”

Zuzolo points out that type of rally occurred a year ago, but says it fizzled out in the middle of 2018 as trade disruptions escalated.

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