A rising US dollar hit commodity prices hard overnight. Iron ore, gold, copper, silver and oil prices all fell as the greenback jumped sharply.
The Australian dollar tumbled, trading just above the 79 US cent level.
In equities, the Chinese market bounced back quite strongly, rising more than 3% for the strongest rise in four months as local investors cheered moves by the government to spend more money on infrastructure and reforms proposed for the financial sector, including linking the Hong Kong and Shenzhen markets.
Markets elsewhere in Asia though were up less than 1% and Australia fell 0.8%.
Markets in Europe charged ahead, jumping more than 2% as fears about Greece eased (except London where the gain was less than 1%).
In the US though markets traded weakly all day and eventually turned lower in the final hour, but at the last minute, the Dow turned high and jumped 13 points to close at a new high of 18,312,39. The S&P ended a three day rise and missed setting a new high after hitting one on Monday.
That left our market with a small gain to start with this morning.
But the impact of lower commodity prices will hit here.
Iron ore hit a new two-week low of $US58.40 a tonne, down 1% from its previous close of $US59.00 a tonne.
It’s still 25% above its April 5 low of $US46.70 a tonne, but has lost 6.6% over the past six sessions with most of that seen in the last two days.
Oil prices fell to their lowest level this month in New York this morning as the greenback firmed.
Oil futures fell under $US58 a barrel overnight in New York. It was trading down 3.58% in early Asian trading this morning at $US57.30. Brent crude futures in London dropped 2.2% to just over $US64 a barrel.
The stronger US dollar saw Comex gold prices lose $US20 an ounce to $US1208 in New York, a fall of 1.6%. Comex silver also dropped 66.1 cents, or 3.7%, to $US17.071 an ounce.
Comex July copper fell 6.9 cents, or 2.4%, to $US2.8375 a pound in New York in the biggest reaction to the soaring dollar.
