Gold Price Movements And Australian Dollar

By Author: Zharotsky
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If a forex trader wants to trade commodity currencies, then the best way to use commodity prices in forex trading is to always keep a watchful eye not only on the forex market, but also on the commodity prices movements. It is a good idea to follow how the foreign exchange market reacts to the way the commodity prices move. Trading commodity currencies provides a number of profit-gaining opportunities for the forex traders.

The most widespread commodities that have tight links with the currencies are oil and gold, and they are closely tied to such currencies as Australian and New Zealand dollars and Canadian dollar accordingly. Respectively, the main exporters of the above-mentioned commodities are Australia, New Zealand and Canada, which makes their currencies dependent on the commodity prices movements.

Gold traders can be amazed to find out that trading Australian dollar in the forex market is similar to trading gold. Australia is the world's third largest exporter of gold, and Australian dollar has almost 90% correlation with this commodity. Literally speaking, when the gold prices increase, the value of ...
... Australian dollar increases, too.

Australian and New Zealand dollars hold high positions in terms of forex trading thanks to the fact that they are commodity currencies. Their value is linked to the export of gold that is characteristic of Australia and New Zealand - these countries keep on being the largest exporters of these commodities in the world. These currencies' daily ranges in the forex market are 30-40 pips on average - the same as the major currencies' - only in case a deleveraging effect doesn't occur. If it takes place, high volatility is observed in the currency pairs including these currencies.

What is more, closeness of New Zealand to Australia makes the latter a perfect destination point for exporting New Zealand goods. This results in the fact that the wellbeing of New Zealand's economy is tightly linked to the wellbeing of the Australian economy. This accounts for AUD/USD NZD/USD having 95% of positive correlation with gold for the same period of time. The correlation of NZD/USD with this commodity is a bit less than Australian dollar's, but it still remains strong.

In general, if a commodity trader looks for a change from the common pro gold trade, trading commodity currencies such as NSD/USD and UAD/USD provide great money-making opportunities worth trying. What is more, forex traders take wonderful advantage of capitalizing on commodity currencies as well.

Even if you are newbie in Australian dollar trading, you will surely trade with profits. Just order Forex Expert Advisor - EA Shark and forget about learning tons of financial analysis literature. Forex is easy if you use automated trading systems.