Thursday, August 25, 2011

Commodity prices and the Dollar Index

Taken from Yahoo Answers

Why do commodity prices rise when the dollar falls and vice versa?

consider a loaf of bread. costs one dollar. that one dollar is worth one dollar. it's an even trade. "the dollar falls". the dollar is now no longer worth a dollar. the bread is still worth the price of the dollar before it fell, so the price must be raised to compensate for the lower value of the dollar.


News That you can use