Arabica Coffe Price Update

Arabica Coffe Price Update

The price of arabica coffee futures on the commodity exchange ICE Futures New York in the early hours of Friday closing trade (2/12) ended down. The drop in the price ofarabica coffee is still triggered a weakening of Brazil's currency Real.

At the close of trading yesterday, currency of the currency pair USDBRL strengthened 1.10% at 4.0244. The decline in Brazilian Real triggered the economic projections andthe revelation of the depressed credit rating.

Yesterday, the Organization for Economic Cooperation and Development (OECD) alsocut its projection for global growth. The OECD stated the economy of Brazil, Germanyand the u.s. slows and warned that some emerging markets are at the risk of volatilityin exchange rates. Among major economies, Brazil is the only one currently in recession and that the recession prove deeper and longer than expected.

Weakening of the Real Brazil also occurs after the drop in credit ratings from Brazil,the world's largest sugar producers, as the market anticipated further depreciation ofthe local currency against the dollar.

Michael McDougall, head of the Brazil desk at Societe Generale, said. "One of the bigfactors is of course currencies and S P & Brazil lowers further into junk territory."

Weakening of the Brazilian Real means the strengthening of the u.s. dollar, makingcommodities become more expensive, resulting in declining demand.

Arabica coffee futures price for the most active contract in may 2016 closed down at position 1.1610 dollar, down by-0.50 cent or equivalent-0.43 percent.

Forex chair Center estimated that the price movement of Arabica coffeefutures on the ICE Futures New York on the next trade is still potentially weakened byforecasts of weakening of the Brazilian Real depressed Brazilian economic slowdown.

Arabica coffee futures prices on ICE Futures New York the potential to test the Support level at 1.1300 1.1000 dollar and dollar. While the Resistance level would be at hand in case of price increases is on position 1.1900 dollars and 1.2200 dollars.