Dollar’s commodities link is creating risks, BIS paper warns

The dollar’s new positive correlation with commodity prices could contribute to higher inflation and low growth, says research published by the Bank for International Settlements.

If the link persists, it could also endanger macro-financial stability, says the paper. Commodity-importing countries could find themselves hit by severe falls in their currencies’ purchasing power.

“Commodity prices and the value of the US dollar have recently moved up and down in tandem,” say authors Boris Hofmann

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