Is the U.S. dollar devaluation taking hold in commodity prices?
"In New York, ICE October raw sugar moved to a three-year high above 19.30 cents a pound, up 3.8 per cent on the day and fast approaching a 2006 peak of 19.73 cents a pound. Above that level, the market will be at the highest in 28 years. The key ICE March contract, which will be the market benchmark later this year, moved above 20 cents.
The front-month raw sugar contract has rallied 79.5 per cent so far this year.
The weakness of the US dollar against the euro and a surge in crude oil prices – making more profitable for Brazilian producers to process sugarcane into ethanol rather than into the sweetener – also contributed to Monday’s rally, traders said.
Other commodities markets were also higher, lead by strong gains in energy and base metals. The weakness of the US dollar, which traded at $1.4335 against the euro, also boosted precious metals. Spot gold in London traded at $961 a troy ounce, recovering from last’s weeks losses.
In afternoon London trading, Nymex September West Texas Intermediate was $1.824 higher at $71.34 a barrel while ICE September Brent rose $1.64 to $73.34. Earlier, Brent oil hit a 2009 peak trading as high as $73.51 a barrel.
On the London Metal Exchange, all the metals with the exception of tin hit their highest level so far this year. Copper for delivery in three months led the charge, rising 4 per cent $5.997 a tonne. Aluminium jumped 3 per cent to $1,960 a tonne. Zinc, lead, nickel also hit their highest level so far this year, rising about 4 per cent."