The US dollar made advances and grew stronger against the euro as economic worries in Europe and the recent bankruptcy of Greece sparked fear that the demand for goods and services will again see a decline in Europe especially Greece affecting the recovery process. Thus the rise in the value of the dollar from $1.2560/euro from $1.2614 (Smith 2010) also drove prices of oil down.
Thus, currently an uncertain environment prevails for investors even though strengthening of the US dollar means that the need for alternative investments has declined however, this comeback by the currency is not due to increase or improvement in the economy in real terms rather it is a consequence of deteriorating economic situation in the European continent which have driven the prices of these commodities low. Investors should keep a lookout as the economic situation may slide back because of the lack of demand for goods and services by Europe which could impact manufacturing at home again driving inflation and prices of commodities upwards as suppliers remain dormant due to low selling revenues and declining demand.
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