There has been a lot of speculation regarding the value of the of the US dollar index and its impact on commodities. And yes, there is a strong correlation between the two. Since bottoming in the fall, the dollar index has risen roughly 6%. A rising dollar is bearish for commodities because it discourages US exports and discourages US imports. Nearly 83% of the value of the US dollar index is made up of the Euro, the Yen and the Pound. The US dollar index in recent years has had a very strong inverse relationship with crude oil prices. Thus, at least longer term, the value of the US dollar index could have a big impact on restaurant commodity prices. But one could argue that for the short term the biggest currency influence on restaurant commodity prices could be the Australian dollar. You see, a notable portion of the lean boneless beef that is utilized in the US for ground beef products is imported from Australia. And in the past, a rising Australian dollar has been very bullish for US lean boneless beef trimming and thus ground beef prices.
