Definition of Commodity pairs:
The commodity pairs include pairing the U.S. dollar (USD) with the Canadian dollar (CAD), Australian dollar (AUD), and the New Zealand dollar (NZD). The Russian ruble (RUB), Brazilian real (BRL), and Saudi riyal (SAR) are also currencies sensitive to prices of commodities.
Three pairs created by Forex including currencies from countries that possess large amounts of commodity type resources. The pairs are: USD/CAD, USD/AUD and USD/NZD - the United States dollar (USD), the Canadian dollar (CAD) the Australian dollar (AUD) and the New Zealand dollar (NZD). These are paired because of the high correlation to changes in commodity prices. Both the AUD/USD and NZD/USD are highly correlated to rising and falling of gold prices and the CAD/USD pair is correlated to rising oil prices.
The commodity pairs, or commodity currencies, are those forex currency pairs from countries with large amounts of commodity reserves. These pairs are highly correlated to changes in commodity prices since the countries produce and export various commodities. Traders and investors looking to gain exposure to commodity price fluctuations often take positions in commodity currency pairs as a proxy investment to buying commodities.
How to use Commodity pairs in a sentence?
- Examples in include the Australian, Canadian, and New Zealand dollars as well as those currencies of oil-producing nations.
- Investors trade commodity currencies, in part, to take advantage of commodity price fluctuations that drive these countries' exchange rates.
- The commodity pairs refer to currencies in economies sensitive to changes in commodity prices, which often are countries that rely on commodity exports for their GDP.
Meaning of Commodity pairs & Commodity pairs Definition