For the first time since 1987, the U.S. dollar is on pace for the worst January in 31 years. The last time the dollar was trading below the 90 mark was in 2014.
Treasury Secretary Steve Mnuchin has been giving mixed messages about the strength of the dollar. Earlier this month, he said he wasn’t concerned about the weak dollar. The next day, he reversed his message by saying the dollar’s strength is in the best interest of the country.
President Trump has said he wants to see a strong dollar even though a weaker dollar is more beneficial for commodities.
One of the commodities benefiting from the dollar’s waning value is oil. According to Pete Meyer of S&P Global Platt, the strength in the oil market can be attributed to two factors: the funds are there and supply is on track with demand now that the oil glut has been worked through.
“Trump is talking about opening up offshore again,” he said on AgDay. “We expect production to ramp up. It’s been a nice rally, but we think it kind of holes in here.”
Corn is another commodity that is hoping to benefit from the weak dollar. In 2017, a perception change drove an oil market rally. Even if the perception changed in corn, Meyer said the two are vastly different.
Hear Meyer’s full comments on AgDay above.