I don’t know if any of you look at the market like I do, (I’m sure some of you do), but has anyone noticed how the commodity currencies have been dominating lately?
I mean…the NZD has been killing it this week so far. The AUD just started to make a come back today so far today, after a good correction last week. And the CAD has been taking names also.
I’m sure we all see different things, (and there are very many), but I think this definitely says something about the global situation lately.
Anyone read anything that kind of explains this?
I don’t know if any of you look at the market like I do, (I’m sure some of you do), but has anyone noticed how the commodity currencies have been dominating lately?
I mean…the NZD has been killing it this week so far. The AUD just started to make a come back today so far today, after a good correction last week. And the CAD has been taking names also.
I’m sure we all see different things, (and there are very many), but I think this definitely says something about the global situation lately.
Anyone read anything that kind of explains this?
I just thinks it’s very interesting, that’s all.
Mike[/QUOTE]
yes … Kiwi and Aussie are closely correlated with their terms of trade.
Kiwis biggest import is dairy… And this has dropped 21% over the last few months… It will begin bringing the kiwi down… In all likelihood this weeks high will be the turning point for a monthly loss on the nzdusd.
Looks like these currencies you mentioned are turning back now. On a macro perspective, these higher-yielding commodities generally benefit from an improvement in risk sentiment and lose ground when risk aversion is present in the markets. Of course there are specific factors that affect each currency but they tend to drag each other in the same direction, particularly for NZD and AUD.