Raw currencies are the currencies of the countries where raw materials dominate in exports. These can be natural resources or agricultural products. The main revenue in the budget of such countries is formed by the sale of raw materials. Obviously, there are not only developing countries on this list, but also developed countries. And now let’s talk about commodity currencies in more detail.
Oil
Strans, who live mainly from oil trade, are quite numerous. But I only want to mention a few of them. First of all, it’s Canada. This country is not only one of the largest oil producers, but also its main supplier to the United States. On this basis, there is a correlation between the value of oil, Canadian dollar and US dollar. If oil prices rise, it has a positive impact on the Canadian dollar. But the U.S. isn’t benefiting from a rise in Canadian oil prices, and this is a negative factor for the U.S. dollar.
Dependence of the national currency on oil prices can also be observed in Norway, Mexico and Russia. Therefore, when trading currency pairs with the Norwegian krone, Mexican pesos and the ruble, one should always pay attention to the situation on the world oil market. These commodity currencies directly depend on it.
Iron ore, coal and gold
This group of commodities has a significant impact on the Australian dollar. Iron ore, coal and gold mining form the basis of the country’s economy. However, in this case, it will be more difficult to track the relationship between the foreign exchange and commodity markets, as we will not be able to see the quotes of coal and iron ore in MT4. We’ll have to look for them on the appropriate resources.
The value of gold also affects African currencies. And above all, it’s a South African rand.
Agriculture
When it comes to the impact of the value of agricultural products on the currency of this or that country, New Zealand is primarily concerned. It is a recognized world leader in the production of dried milk. Therefore, the situation in this market largely determines the rate of the New Zealand dollar. New Zealand currency is popular with traders. But in order to increase the efficiency of trading on the NZDUSD pair, it is essential to monitor the GlobalDairyTrade auction data. In any economic calendar you can find out the time of their release.
In my opinion, raw currencies should be included in the list of trading instruments. They’re better than other couples at predicting quality.Fyodorov’s Inga08.10.2018