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Will the strong USD continue to pummel commodities?
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Commodities have been taking a beating from the strong dollar. So will the greenback continue to pummel raw materials or will they get a respite? That all depends on upcoming US data, the Greek debt talks and OPEC which meets on June 5th, says Saxo Bank’s Ole Hansen.
Commodity investors have a busy week ahead of them with a number of events that could potentially move markets. In the past two weeks, commodity prices have been under pressure from the strong dollar. Whether that continues hinges on a raft of US data out next week such as the nonfarm payrolls due on Friday June 5th.
That same day offers an important deadline in the ongoing talks between Greece and its creditors. It is when Greece has to pay its next installment to the IMF. The threat of a Greece failing to get a deal with its creditors has prompted some investors to look to gold for a safe haven, offering support for gold prices, Hansen says.
June 5th is also when members of OPEC gather to discuss production levels. It remains to be seen whether they will raise the current level of 30 million barrels a day or maintain it.