Jump to content
AskTraders Trading Community
  • 0

Will commodity-linked currencies keep rising in future?


Simon Mugo

Question

1 answer to this question

Recommended Posts

  • 0

Commodity-linked currencies led by the Canadian and New Zealand dollar have rallied higher recently driven by the rally in crude oil prices, which are a major income earner for their respective countries. This raises the question of whether these currencies shall keep rallying in future or whether the recent spikes are just short-term anomalies that shall quickly fade away.

To answer this question, we must ask ourselves whether the rice rally was triggered by a short-term driver such as a geopolitical development, or whether the price increase was driven by a more long-term trend. The answer to this is that the recent crude oil price rally was largely driven by declining global supply of this crucial source of energy combined with rising global demand for the same commodity.

The current state of the global oil industry is unlikely to change in the near future are US sanctions and OPEC supply cuts are likely to remain in force throughout Q2 2019. Therefore, it is highly likely that commodity-linked currencies will keep rising for the foreseeable future.

Link to comment
Share on other sites

Join the conversation

You can post now and register later. To reply to this question, sign in or create a new account.

Guest
Reply to this question

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.

×
×
  • Create New...