Commodities slumped to a five-year low led by agriculture items produced by Brazil on speculation a slump in the country’s currency will fuel exports.
The Bloomberg Commodity Index dropped 0.6 percent at 11:03 a.m. in London after falling to the lowest since July 2009. Raw sugar futures fell 2.3 percent and arabica coffee declined 1.4 percent. Brazil is the biggest producer of both commodities.
Brazil President Dilma Rousseff’s re-election damped speculation for a change in policies, sending the real down 3.2 percent today, the biggest decline since 2011. The real weakened 33 percent against the dollar since Rousseff took office in January 2011. Declines in the Brazilian currency tend to encourage export sales of products traded in dollars.
This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.