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أكتوبر 8, 2015

The Currency – Commodity Price Relationship Forex Traders Should Know

Benefiting from forex currency trading involving predicting the market movements and positioning oneself to profit from that movement. A trader should be aware of the basic currency market indicators and factors that contribute to both short-term and long-term market movements. One such thing trader should know is the relationship between some currencies to changing commodity prices.

The Oil and Canadian Dollar Relationship: Over the past decade CAD and crude oil price have shown a positive correlation exceeding 80%. Canada is the 7th largest producer of crude oil, has the second biggest oil serve in the world and is the most significant oil supplier to the United States. These factors contribute to greater co-relation between oil price and CAD. USD also shows high positive correlation to crude oil prices as USD is the currency used to determine crude oil price.

Oil and Japanese Yen Relationship: Crude oil price changes and JPY shows a negative correlation because Japan imports almost all crude oil it needs. Thus theoretically CAD/JPY is one of the most sensitive currency pair with respect to crude oil prices.

The Gold and Australian Dollar Relationship: Like oil CAD relationship, gold price and AUD shows a high positive correlation because Australia is the 3rd largest producer of gold. A similar correlation can be seen with gold and NZD, this is because the close relationship between NZD and AUD because of the geographical proximity which makes Australia the prominent destination for New Zealand exporters. Know more about Gold and Currency Relationships.

This blog is written for Oriental Financial Brokers, Dubai, UAE. OFB is the leading forex currency trading broker offering advanced web-based trading platform and a range of account features.

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أغسطس 3, 2009

Commodity Futures Trading

Commodity trading involves the exchange of raw or primary products. It can be the buying and selling of future contracts in Gold, Silver, Oil, Gas, Platinum, Copper, Zinc, Cotton, Wheat, Corn and many more physical products. These row commodities are bought and sold in standardized contracts. The most extensively traded and most liquid commodities are Oil and Gold.

The buyers and sellers have some obligations. The buyer is responsible for taking delivery and paying for the cash commodity during a fixed time period. The seller is responsible for delivering the commodity, for which he/she will be paid the price that was decided in the exchange pit by the dealers. The price value here depends upon the grade of the specific material. The buyer and seller are qualified to eliminate their obligation by offsetting their trade at the exchange prior to the contract comes
due.

This information provided by Orient Financial Brokers (OFB), licensed and regulated by Central Bank of the UAE , to conduct brokerage in Foreign Exchange, Commodities and Money Markets. OFB offers a number of commodity futures contracts including all main oil, grain and metal contracts. (Click here to see the lists)