The strength of the U.S. dollar has been negatively impacting exports of American agricultural goods. Higher interest rates and global geopolitical events heavily influence its value. “Fourteen months ago we saw probably a multi-year high in terms of the strength of the dollar against many key currencies such as the Indian rupee, the Chinese yuan, the Japanese yen, and the Euro as well,” said David Magaña, Senior Analyst covering fruits and tree nuts for Rabo AgriFinance.
The strong dollar requires foreign buyers to purchase more expensive U.S. currency before buying American products, which limits their ability to acquire U.S. ag goods. Magaña said the strength of the U.S. dollar began to weaken against most other currencies at the beginning of last year. That can have a favorable impact on ag exports, particularly tree nuts, Magaña explained. However, “the dollar has continued to strengthen over the past few months.”
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Brian German
Ag News Director / AgNet West