Here are three popular currency pairs that are linked to commodities. It is important that you know about this in case you choose to trade on these currency pairs in the Forex market. Try here to trade on them.
The AUD/USD is the quotation in the Forex market that denotes the value of the Australian dollar against the US dollar value. So suppose that the AUD/USD is 0.8000 then this means that you will need 80cents US to be able to buy one Australian dollar. When one trades in AUD/USD they refer to it as “trading in the Aussie”.
The traders in the AUD/USD currency pair look at the metals and the price trend in this space to predict the valuation of the AUD/USD pair and how it may move next. The Australian economy is centered around mining. This is for metals like copper and precious metals. So when you see that the trend of copper is bullish than the traders in the currency market will look to buy the AUD/USD pair. This is in anticipation that the currency pair will move in a bullish trend. You, however, would also have to analyze the announcements of the ReserveBank of Australia.
The NZD/USD is the value of the New Zealand dollar against that if the US dollars. Trading on this currency pair is referred to as “Trading the Kiwi”.
The economy of New Zealand is dependent on agriculture and the changes in the price of the commodities globally affect this currency pair. Also, the economy of Australia andNewZealandareinterconnected so you need to check the AUD/USD pair too when trading in NZD/USD. The policy changes in the Reserve Bank Of New Zealand has to is monitored closely.
The USD/CAD is the value of the USdollars against that of the Canadian dollar. This trading pair is referred to as “Trading in the Loonie”. The oil market is watched closely by those who are trading on this currency pair. The oil market trends impact the valuations of this currency pair.
The second largest supplier of oil to the world is Canada since the economy of Canada is linked to oil. When there is a bullish move in the oil prices then this helps the Canadian dollar. When the oil prices are bearish so is the Canadian dollar. This will cause an up move in the USD/CAD. The policy stance of the Bank of Canada should also be watched by those who trade on this currency pair.