By Nicole Friedman
NEW YORK--Coffee prices gained Friday as the dollar weakened and
traders eyed dry weather in some coffee-growing regions.
The dollar slumped Friday after a quarterly measure of U.S.
labor costs indicated stagnating wages. The WSJ Dollar Index, which
tracks the dollar against a basket of other currencies, recently
traded down 0.7%.
A weaker dollar can boost demand for commodities by making
dollar-priced raw materials cheaper for buyers using foreign
currencies.
Most commodity prices have slid this month, with the Bloomberg
Commodity Index falling to multi-year lows earlier this week. As
the dollar weakened Friday, traders who had bet on lower prices
closed out those positions to lock in profits, said Mike Seery,
president of brokerage Seery Futures.
"That's a huge, huge move" in the dollar, Mr. Seery said. "Today
it looks like you're going to get a relief rally in the commodity
markets across the board."
Arabica coffee for September delivery recently traded up 1% at
$1.24 a pound on the ICE Futures U.S. exchange.
Coffee prices have risen for three straight sessions on concerns
that dry weather in Vietnam and Indonesia could threaten crops
there. Vietnam and Indonesia are large growers of robusta coffee,
and concerns about the robusta crop has pushed some traders into
the arabica market.
In other markets, raw sugar for October fell 0.4% to 11.23 cents
a pound, cotton for December rose 0.7% to 63.99 cents a pound,
cocoa for September rose 0.3% to $3,229 a ton, and frozen
concentrated orange juice for September rose 1% to $1.24 a
pound.
--Julie Wernau and James Ramage contributed to this article.
Write to Nicole Friedman at nicole.friedman@wsj.com
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