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Hansen: The Dollar's hurting commodities again and here's why

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The Bloomberg Commodity Index is down more than 2% over the past three trading days. Saxo's Ole Hansen says that yet again it's the US dollar that's to blame as he illustrates the negative correlation between the two.

Crude oil had seen a dramatic rally throughout April and the beginning of May but has been under pressure over the last few days. Ole says it's recovering a little this Wednesday but the fundamental issues remain unchanged - namely that OPEC production continues to rise and that US production isn't slowing fast enough. Ole explains that this combined with a strengthening dollar and the Goldman Sachs report suggesting crude could fall to USD 45 by October, have hurt sentiment.

Gold meanwhile is stuck in a range. Ole says there needs to be more clarity on the US economy before gold can break out.