Hello. My name is Simon Derrick. I'm Chief Currency Strategist at BNY Mellon and this is CantosCharts.

This week we've been looking at one of the dominating factors of the last 12 months - USD weakness and in particular we've been looking at some of the flow data that we've pulled from our custodial system which shows how the USD weakness has been supported by very real investor selling driven fairly directly by the fiscal policy in the United States and expectation that monetary policy will remain loose for a fairly extended period of time. Something that was obviously cemented by last week's FOMC meeting. In particular, one of the things that has been particularly apparent coming through late last year and earlier this year is investors continue to lose faith in the USD. One of the key questions we need to ask is where the money has been going?

We've looked at in recent days at the inflows into emerging markets and indirectly how those flows have been recycled into the EUR and European peripheral bond markets.

There is another area that this USD weakness, though, has had a very direct impact on and that is on commodity prices and particularly on food prices.

Here we have the USD index weakening through the course of the second half of last year, a brief respite going into the end of 2010 and then renewed USD weakness starting to take place.

Against this we've measured the performance of the CRB and on the bottom we've measured the performance of the corn price, of corn futures.

One of the things that really stands out so clearly in this chart is how the rally in the CRB and the rally in corn and, indeed, the rally in a wide range of commodities really started exactly at the point that the USD starts to weaken.

There is indeed a brief respite in the CRB and a brief respite in corn prices here in the latter part of last year that matches very closely to the USD's rebound. But as soon as the USD has started to weaken again, these prices have headed onward and upwards.

Whilst I certainly wouldn't argue that USD weakness and the loose monetary policy has been the sole factor behind higher commodity prices and higher food prices, it clearly has contributed as these charts only too clearly highlight. Of course, if we're talking about higher commodity prices and particularly higher food prices, then we need to start talking about commodity related currencies.

Here is a couple of fairly simple examples. Here's the Russian equity market. Not food necessarily, but certainly oil related and we're talking at a time when the oil price has just broken $90 a barrel and again a fairly direct match in its performance to that of the flows out from the USD.

If we move on from there, here's the CAD. Again, a classic commodity related currency. Look at the pick-up in the pace of inflows into the CAD over the last couple of months and how that naturally matches to what's taking place as the money flows out of the US and as commodity prices start to spike.

But of course the idea of higher food prices and high commodity prices generally is particularly topical this week given the fact that one of the main concerns in North Africa and Middle East for the populous there has obviously been sharply higher food prices.

You can certainly see here where we start to see the sharp sell-off taking place in the Egyptian equity market how that impact feeds through.

At the moment there are stories out there about the likes of Algeria and Bangladesh starting to sharply increase their buying on the world markets of food. It seems reasonable to suppose that pressure will continue and if that is true, then it seems to us that expectation will be that investors will continue to seek out those commodity-related currencies, then we will continue to see currencies with central banks.

There is one final point, perhaps it also leads to countries who have been keeping their currencies artificially constrained deciding that perhaps in the circumstances, allowing their currencies to strengthen to help offset some of those stronger food prices might mean that discretion is the better part of valour.

My name is Simon Derrick. This has been CantosCharts.