Markets · Global, FX & Commodities

The dollar, the rest of the world, and raw materials

Reading the data…

1. The dollar

The Fed's broad trade-weighted dollar index and six major crosses. A rising dollar tightens financial conditions for the rest of the world and weighs on commodity prices and US multinationals' earnings. Moves are shown as the change in the dollar's value (positive = dollar stronger).

2. Equities outside the US

US-listed country and regional ETFs, total return in dollars (Yahoo adjusted closes), so currency moves are included. "vs SPY" is the difference in return over the same window.

3. Rates abroad

Policy rates and 10-year government yields. Wide US-minus-abroad rate gaps support the dollar; narrowing gaps usually precede dollar weakness.

4. Commodities

Energy and metals from FRED spot series and US-listed ETFs. The copper-to-gold ratio (industrial demand over safe-haven demand) has historically moved with the 10-year yield; a gap between the two is worth a look, not a trade.

Methodology & sources

FRED: DTWEXBGS (broad dollar index), DEXUSEU, DEXJPUS, DEXUSUK, DEXCHUS, DEXCAUS, DEXMXUS (noon buying rates, New York Fed; about a one-week lag), ECBDFR, DFF, DGS10, IRLTLT01DEM156N, IRLTLT01JPM156N, IRLTLT01GBM156N (OECD monthly long-term yields), DCOILWTICO, DCOILBRENTEU, DHHNGSP, PCOPPUSDM (IMF monthly copper).

Yahoo Finance adjusted daily closes: SPY, EFA, EEM, EWJ, EWG, EWU, FXI, INDA, EWZ, EWY, GLD, CPER, USO, DBC. YTD = since the last close of the prior year.