does the price of oil affect the Canadian Dollar?
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  1. #1
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    Dec 2006
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    Default does the price of oil affect the Canadian Dollar?

    i just was interest to know if this was true and i also want to know what other commadaties affect currency prices.

  2. #2
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    Yes, commodities most certainly do affect currencies. The Canadian Dollar tends to move in tandem with the price of oil. The reason for this is because Canada is a huge exporter of oil, so the higher the price of oil the better it is for the oil companies exporting the product.

    The Australian dollar is also very much affected by the price of gold.

  3. #3
    Have to agree with Pipbull, there's lots of oil up in Canada at the moment so their dollar fluctuates depending on the price.

  4. #4
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    Japan has very very little oil reserves so when the price of oil goes up the JPY loses value.

    On the other hand Canada produces a lot of oil, so as the price goes up the Canadian dollar goes ups.

    So what the best pair to trade when oil is rallying?

    CAD/JPY

    When oil goes up CAD goes up and JPY goes down and vice versa.

    I love this job!
    This is a quote I got from another forum!
    Last edited by groovenator; 01-06-2007 at 07:10 AM.

  5. #5
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    Quote Originally Posted by groovenator View Post
    This is a quote I got from another forum!
    sweet!!! i really think that is cool.

  6. #6
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    Quote Originally Posted by drpipslow View Post
    Commodity prices such as gold and oil can have tremendous effects on the currency markets.

    Seasoned traders will often watch gold and oil futures to predict movements in specific currencies. This strategy works well when a country is a significant producer or importer of gold or oil.

    Changes in the price of those commodities translate into changes in revenue for the domestic corporations. The currencies most directly affected are AUD, CAD, NZD, and JPY.

    Looking specifically at gold, trading the Australian dollar is similar to trading gold. The Australian dollar has an 80% positive correlation with gold prices.

    This means that when gold prices rise, AUD appreciates as well. Traders who understand and often trade gold have a lead on others when trading AUD.

    The key advantage to trading gold and AUD/USD together is that it allows traders to leverage the same views, while diversifying risk.

    The strong correlation between gold and AUD/USD stems from Australia’s status as the world’s third largest producer of gold, representing over $5 billion in exports each year.

    As gold prices rise because of weakness in the U.S. dollar or gold supply dwindles, Australian domestic gold producers benefit significantly. Foreigners will have to pay more to import gold, which leads to a rise in the Australian dollar.
    found some more interesting quotes related to this topic. this is very very interesting.

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