The Effect of US Dollars Towards Rubber Price 

When US Dollars (USD) value increases by 1 unit, rubber price will respond positively by +0.409 unit.  

Using Linear Regression technique with daily data for 5 years from Jan 2002 to May 2007 to analyze the relationship of US Dollars value (USD:THB) and Ribbed Smoked Sheets rubber (RSS) price, we find that when US Dollars (USD) value increases by 1 unit, rubber price will respond positively by +0.409 unit at 99% confidence level of t-stat.

 We can see the relationship between US Dollars value towards Thailand Baht towards Rubber price that when US Dollars appreciates (Thai Baht depreciates), it will affect positively the increase of Rubber Price in Thailand.  This is because when Baht depreciates, it increases the international buying power and later causes higher buying power and rubber demand.

 On the contraty, when US Dollars depreciates (Thai Baht appreciates), it will affect negatively the decrease of Rubber Price in Thailand.  This is because when Baht appreciates, it decreases the international buying power and later causes lower buying power and rubber demand.