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The recent depreciation in the US dollar has helped to boost commodity prices. But while strategists at Capital Economics expect a stronger dollar to weigh on most commodity prices later this year, oil prices will still rise.

A stronger dollar would weigh on commodity prices later this year

“We think that oil prices will overlook dollar strength and that other factors will drive the price. Oil has a relatively weak relationship with the dollar and we expect that this will continue to be the case. Instead, we suspect that the release of pent-up demand, at a time of constrained global supply, will help to keep the global oil market in a deficit and boost prices.”

“If we are right and the US dollar appreciates, this would drag on the prices of both industrial and precious metals. Nevertheless, we doubt that the price of oil would fall as other factors, primarily strong growth in demand, should support prices.”