Online Commodities Broker Randolph Read Discusses the Market

Aug. 8, 2008 - PRLog -- Randolph Read Trading Group, LLC, a full-service guaranteed introducing commodity brokerage firm and a member of the National Futures Association gives commentary on Commodities and the US Dollar.

After a multi-year downward trend, it appears the US Dollar may be finding some footing.
The US Dollar as measured by the US Dollar Index has risen to 74, up 3.8% from it's most
recent low of 71.31 on July 15th.  This may have more to do with other world economies
weakening rather than a strengthening of the US economy.  In it's early aggressive easing
of interest rates, the Federal Reserve focused more on providing liquidity to the markets in
an effort to soften the blows of the credit and housing crises.  Certainly this did not help the
US Dollar as it was sent lower through the first half of 2008, extending what has been a long period of weakness.  In fact, the beginning of this downward trend may be traced back to February of 2002 when the US Dollar Index traded at a level of 120.4.  At today's level of 74, that would put the US Dollar down 38.5%.

The currrent rally, while having easily jumped the 50-day moving average at 72.89, may be tested while trying to overcome the 200 day moving average at 74.17.  However,  if it does, we may be seeing confirmation of a new trend.  This has only been helped by the apparent weakening of European economies as evidenced by recent economic releases.  While the ECB has been raising rates in an effort to stem inflation, it could be forced to begin lowering them sooner rather than later.  This may set up an environment where the Federal Reserve can begin to tighten while the ECB is easing. This might certainly put the US Dollar in favorable position.

What does all this mean for dollar denominated commodities?

Well, it appears that the knee-jerk reaction has been massive selling.  We have seen corrections in energies, grains, metals, and others.  While it can be argued that some markets had become overbought, the supply/demand picture in a world of rapidly developing economies such as China, India and other emerging markets should put a floor on the selling at some point.  A rising US Dollar might certainly provide a headwind to some commodity markets but the long-term prospects still look good.

Randolph Read Trading Group caters to investors ranging from beginner to experienced, individual to institutional, speculator and hedger. We strive to provide valuable professional advice, a reliable and efficient platform, and prompt customer care. Trade with a professional advisor or, if you choose, do it yourself with our online trading platform. Whatever your needs, we have the right account for you. Simply select your account type, complete an application, and fund your account.

For more information, visit the website at www.randolphread.com or give us a call at 866-840-9075.

# # #

Randolph Read Trading Group caters to investors ranging from beginner to experienced, individual to institutional, speculator and hedger. We strive to provide valuable professional advice, a reliable and efficient platform, and prompt customer care. Trade with a professional advisor or, if you choose, do it yourself with our online trading platform. Whatever your needs, we have the right account for you. Simply select your account type, complete an application, and fund your account.