Thursday, September 11, 2014

Australian and Canadian Dollars Rolling Over Again (excerpt)

The currencies of countries that are major exporters of commodities tend to be highly correlated with the CRB raw industrials spot price index. This is especially so for the Australian and Canadian dollars. It’s not a perfect correlation, but they both do reflect the major trends in industrial commodity prices. Both currencies were especially weak last year. They regained some ground earlier this year, but seem to be rolling over again.

Today's Morning Briefing: Decoding Currencies. (1) Interesting times. (2) When dollar goes up, commodities go down, and vice versa. (3) That’s especially true for industrial commodities, crude oil, and gold. (4) Fundamental driver of dollar and commodity prices is relative strength of US economy. (5) Dollar should strengthen as US becomes less dependent on oil imports. (6) Draghinomics and Abenomics boil down to currency depreciation policies. (7) Scots free? (8) Australian and Canadian dollars remain commodity currencies. (9) Focus on underweight-rated S&P 500 Materials. (More for subscribers.)

No comments:

Post a Comment