Commodity currencies are currencies that are highly correlated with the prices of commodities, such as metals, oil, and agricultural products. The currencies of countries that are major exporters of these commodities are often considered commodity currencies because their values are closely tied to the demand and supply of the underlying commodities.
The list of the major commodity currencies:
- Australian dollar (AUD): Australia is a major exporter of iron ore, coal, gold, and other metals, as well as agricultural products such as wheat and beef.
- The Canadian dollar (CAD): Canada is a major oil producer and exporter, and the value of the CAD is closely tied to the price of oil. Also, Canada is a big exporter of natural gas and other natural resources such as lumber and minerals.
- Norwegian krone (NOK): Norway is another major oil and gas exporter, and the value of the NOK is closely linked to the price of oil. Norway is also a major exporter of seafood, timber, and metals.
- Mexican peso (MXN): Mexico is a major oil exporter, and oil exports are a significant source of income for the country. As a result, the value of the MXN is influenced by oil prices.
- Brazilian real (BRL): Brazil is a major exporter of soybeans, coffee, sugar, and other agricultural products, as well as iron ore and oil.
- Japanese yen (JPY): Japan is heavily reliant on oil imports, and the value of the JPY can be impacted by changes in the price of oil.
- Russian ruble (RUB): Russia is one of the world's largest oil and natural gas producers. It is also a major exporter of metals and lumber.
- The Swiss franc (CHF): Switzerland has a long history of banking and financial stability, and the Swiss National Bank still holds a significant amount of gold reserves. This has helped maintain the Swiss franc's value, which is often considered a safe-haven currency in times of economic uncertainty.
- United States dollar (USD): While the United States is not a major oil exporter, the USD is typically seen as a safe haven currency and can be influenced by global oil prices as investors shift their investments.
These currencies tend to be more volatile than other major currencies due to fluctuations in commodity prices. They are often affected by global economic events and geopolitical developments that impact the demand and supply of commodities.
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