U.S. Dollar Index Rally Drops Commodities
The rally in the U.S. Dollar Index(DXY) has helped to drop commodities sharply lower this morning. Since June 7, 2010 the U.S. Dollar Index(DXY) has declined lower by nearly 15.0 percent and this has helped most commodities soar to new highs. Traders should watch for intra-day pullbacks in the dollar to see when the commodities and commodity stocks could see an intra-day bounce. At this time gold, silver, and copper are all under pressure this morning.
Last night, the highly followed Shanghai Index(China) rallied sharply higher. The Shanghai Index finished higher by 1.35 percent. Usually, when the Shanghai Index has rallied so sharply in the past copper will generally trade higher regardless of move in the U.S. Dollar Index. Today, that relationship is not occurring as copper is declining. Many traders and investors will follow copper very closely as a sign economic expansion. Some leading copper stocks that are trading lower this morning are Freeport McMoRan Copper & Gold Inc.(NYSE:FCX), and Southern Copper Corp.(NYSE:SCCO). Traders can get a good gauge of copper by following the iPath DJ-UBS Copper TR Sub-Idx ETN (NYSE:JJC).