Commodities Up/ Dollar Down
Commodities headed for the biggest monthly rally in 34 years, led by energy, as the slumping dollar boosted demand for raw materials as a hedge against inflation. In May, the Reuters/Jefferies CRB Index of 19 energy, metal and agricultural prices has gained 13 percent, the most since July 1974. The dollar headed for the biggest monthly drop this year against a basket of six major currencies.
Signs of a recovery in the global economy have spurred demand for fuel, industrial metals and crops. Crude oil was poised for the biggest monthly gain in a decade, and gasoline has soared more than 30 percent in May. Gold, silver and copper surged, while corn and soybeans reached the highest since September.
The dollar weakened, heading for its biggest monthly decline this year against the euro, as growing evidence that the global recession is easing sent investors in search of assets with higher returns.
The U.S. currency dropped to its lowest level this year versus the euro and weakened most against the Australian and New Zealand dollars. The pound rose through the $1.60 level for the first time since November as increased appetite for riskier assets kept the dollar under pressure.
Tags: Commodities, CRB Index
