CRB index reversal: Impact on commodities, inflation, and the Dollar [Video]
|It’s been some time since we last looked at the Thomson Reuters CRB Index, a key indicator for tracking commodity performance and gauging inflation. With inflation softening recently, it’s not surprising that the CRB Index is also reversing. The chart shows a three-wave rally from the 2023 lows, which suggests a corrective movement in an ABC formation, as identified in Elliott Wave theory.
When a correction like this concludes, the next move typically retraces the previous rally. Looking at the CRB Index, we expect prices to move even lower, possibly down to 241. This decline could be further driven by falling crude oil prices, especially if OPEC increases supply as recently announced.
Some may wonder how this will impact the USD. Currently, the correlation is that lower commodities lead to lower CPI, which in turn suggests a lower USD due to expectations of Fed rate cuts. Until the Fed cuts rates a few times, the correlation between a lower CRB and a lower USD could remain in play due to falling US yields. However, once rate cuts are nearing their end, that’s when the dollar may find a bottom.
CRB vs DXY daily chart
If you are interested in detailed view and more analysis like this, you may want to watch below our latest recording of a live webinar streamed yesterday on Monday September 02 2024:
Get Full Access To Our Premium Elliott Wave Analysis For 14 Days. Click here.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.