« Yen tanks across the board as “risk seeking” returns! | Home | The Yen Rebounds in the Asian session! »
The Effect of Commodities upon Currencies!
By Sean Hyman | May 5, 2009
There are many factors that affect currencies…one of which is the price of things like copper and gold. These both have huge influences on the Aussie dollar in particular. For instance, see the attached chart of the Aussie dollar (black/red candles) and of Copper (black line).
Generally speaking, as copper rises, so does the Aussie dollar and also vice versa. So as commodities plummeted this past year (along with stocks too), it influenced the Aussie dollar lower. However, now we have a stable commodity market once again and copper has lead the way on the break to the upside. This will help Australia and its currency in the months ahead as their copper and gold mines prosper due to increasing sale prices yet somewhat fixed costs to mine the copper and gold. The expansion of these profits on their exports of copper and gold will aid the Aussie dollar in heading higher as this trend continues in commodities.
So when you are looking at what is called the “commodity currencies” which are AUD, NZD and CAD, be sure to check out the commodity charts as well. These can be tracked for free at www.stockcharts.com. Just put in $COPPER for copper and $GOLD for gold. Keep in mind that these free charts will lag by one trading day, but they will give you a good overview of where these “commodity currencies” may be headed in the future.
Sean Hyman
Tags: AUD, Aussie, blog, cad, charts, commodities, commodity, copper, currencies, currency, dollar, forex, forextrading, free, free charts, gold, lower, market, nzd, Sean Hyman, stock, stocks, trend
Topics: What To Look At In The Market | No Comments »