Commodity currencies:oil, metals and FX.
Commodity currencies belong to countries that export a lot of raw materials: the Canadian dollar and oil, the Australian dollar and metals, the Kiwi and agriculture, the Norwegian krone and energy.
When their commodity moves, the currency often follows.
The links
CAD and oil, AUD and iron ore and China, NZD and dairy, NOK and energy. The link is strongest when the commodity makes big moves.
Beyond the commodity
These currencies are also risk-on currencies. In a risk-off move, they often fall even if their commodity holds up.
Use it in real trading
The tool informs the decision, it never makes it. Here is how it plays out on real trading days.
Oil rises 8% in a week on supply news. USDCAD drifts lower.
Oil is flat, but stocks fall hard. AUD and CAD weaken anyway.
Mistakes to avoid
- Trading the link on small commodity moves.
- Ignoring risk mood.
- Forgetting the central bank.
What makes it different
Oil, metals and the currencies sit on the same heatmap and cross-rate grid.
Questions
Which currency follows oil most?
CAD and NOK.
Why does AUD follow China?
China buys a large share of Australia’s exports.
Is the link always strong?
No, it is strongest on big commodity moves.