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Understanding the US Dollar Impact on the Coffee Market – Part 2 – Predicting the USD

The #USD directly impacts the price of #coffee (and all #commodities): Dollar strength lowers the prices of commodities and coffee, and dollar weakness increases prices. We looked at this in detail in our last Macro article. Therefor predicting the value of the dollar is an essential component of predicting coffee prices.

In this article, we will first outline our case that #monetarypolicy is the primary driver of USD prices, then we will go through how the Fed’s dual mandate drives monetary policy, and finally, we will outline how the US economy drives #FederealReserve policy. Putting this altogether amounts to a philosophy for anticipating macro-USD impact on #commodity prices like coffee.

Interest Rates and the USD