US$ strength weighs on commodity prices

London

COMMODITY prices came under pressure this week from a strong dollar which surged to multi-year highs against the euro.

The dollar rallied as the European Central Bank neared the launch of its massive stimulus package and after strong US jobs data raised the possibility of a hike soon to Federal Reserve interest rates. A strong dollar makes commodities priced in the US unit more expensive for holders of rival currencies. The European single currency on Friday sank to US$1.0845 - the lowest level since September 2003. The ECB will meanwhile begin its 1.1-trillion-euro (S$1.6 trillion) quantitative easing stimulus on Monday.