For foreign exchange a pay a prone investors, foreign exchange knowledge, learning is essential. Traditionally, the currency of the world a pay a Trader to Australia, New Zealand, Canada and South Africa as a "commodity set a group a " country, meaning that is the currency of these commodity exporters will be subject to the overall trend of commodity prices Significant influence. For now, commodity set a group a has been expanded to Chile (and copper-related), Norway (oil), Brazil (agriculture) and Russia (oil).
Investors If you want a pay a prone currency in these countries, we should pay close attention to commodity price movements, as well as news about the commodity supply shortage or surplus. For example: AUD a pay a Trader take great care that information affecting Chinese steel demand, because China is the world's largest steel producer, which will affect the price of coal and iron ore.
Copper is the most interesting because it is widely used in industry and construction, so copper prices are often considered a leading indicator of the commodity market. Chile is the world's largest copper exporter, and demand for copper is the main factor driving the country's currency.
Of course, other currencies also have specific drivers. For example, dairy exports and lamb prices can affect the trend of the New Zealand dollar.
In recent years, compared with other investment products, there has been a round of important revaluation of commodity value in the market. On the one hand, due to the rapid growth of China's economy, the demand for minerals is huge, the process of industrialization is accelerating, and on the other hand, the problem of safe-haven funds Major currencies such as the US dollar and the euro fled to emerging markets and commodity producing countries. Countries such as Brazil, Australia and Chile have appreciated by 30% to 100% in less than a decade.
The rise in commodity prices has correspondingly increased the terms of trade of these countries, and under the premise of the same conditions, the structure of the balance of payments has been improved and its currency has been strengthened. For example, in 2001, the Australian dollar was worth only 47 cents, but it exceeded $1.1 in ten years. This is due in large part to the weakening of the dollar and the rise in commodity prices for centuries.
One of the best sources of information on the level of commodity prices is the CRB index. Investors are concerned about the CRB spot index, which is closely related to the high level of the Australian dollar.
On the relationship between commodity prices and terms of trade we have introduced here, to learn more please pay attention to the basics of stock winner a river agrace.