Sébastien Bischeri Sunshine's profit is as follows

Have you ever thought about commodities when trading currencies? Or vice versa? What does the Brazilian real have to do with soybeans or the Indian rupee with diamonds?

Let us first define what can be called a commodity currency (or commodity pair).

Generally, commodity currency represents the currency from the country or geographic area that produces a particular commodity, and these commodities will account for most of its exports.

The following table lists some examples of currencies that can be considered commodity currencies:

Argentine peso (ARS) Soybean meal ($8.81B), corn ($6.19B), delivery truck ($3.83B), soybeans ($3.47B), soybean oil ($3.38B), bran ($292M), other plant residues and waste ( 232 million U.S. dollars) and peanut oil (131 million U.S. dollars).

Australian Dollar (AUD) Iron Ore ($67.5B), Briquettes ($51.5B), LPG ($34.1B), Gold ($25.4B), Alumina ($5.6B), Sheep and Goat Meat ($3.07B) and Wool ($2.26) B).

Brazilian Real (BRL) Soybean ($26.1B), Crude Oil ($24.3B), Iron Ore ($23B), Corn ($7.39B), Sulfate Chemical Wood Pulp ($7.35B), Poultry Meat ($6.55B), Frozen beef ($5.67B) and raw sugar ($5.33B).

Canadian Dollar (CAD) Crude oil ($67.8B), automobiles ($40.9B), gold ($14.6B), refined oil ($12.3B), auto parts ($10.8B), sawn wood ($6.35B), primary aluminum ($5.45B) ), potash fertilizer ($5.27B), rapeseed ($3.23B) and rapeseed oil ($2.6B).

Indian rupee (INR) refined oil ($39.2B), diamonds ($22.5B), packaged medicines ($15.8B), jewelry ($14.1B), cars ($7.15B), rice ($6.9B), crustaceans ($4.67B) And non-retail cotton yarn ($2.86B).

Indonesian Rupiah (IDR) Briquettes ($20.3B), Palm Oil ($15.3B), LPG ($8.32B), Automobiles ($4.52B), Gold ($4.01B), Lignite ($2.91B), Stearic Acid ($2.76B) ), uncoated paper ($2.37B) and coconut oil ($1.9B).

Malaysian Ringgit (MYR) Integrated Circuit ($63B), Refined Petroleum ($17.8B), LPG ($11.5B), Semiconductor Equipment ($9.65B), Palm Oil ($8.91B), Rubber Clothing ($4.37B), Others Vegetable oil (US$1B), copper powder (US$873 million), asphalt mixture (US$417 million) and platinum-clad metals (US$127 million).

Mexican Peso (MXN) car ($53.1B), computer ($32.4B), vehicle parts ($31.2B), cargo truck ($26.9B), crude oil ($26.6B), tractor ($10.7B), beer ($5.07B), Tropical fruits ($3.6B) and rail freight cars ($3.57B).

New Zealand Dollar (NZD) Condensed Milk ($5.73B), Sheep and Goat Meat ($2.62B), Crude Wood ($2.31B), Butter ($2.29B), Frozen Beef ($2.09B), Casein ($613M) and Honey ( 237 million U.S. dollars).

Nigerian Naira (NGN) crude oil ($46B), liquefied petroleum gas ($7.78B), scrap ship ($2.26B), flexible metal pipe ($2.1B) and cocoa beans ($715M).

Peruvian New Sol (PEN) copper ore ($12.2B), gold ($6.76B), refined oil ($2.21B), zinc ore ($1.65B) and refined copper ($1.62B), animal meal and pellets ($1.54B) , Lead ore ($1.01B), fish oil ($434M) and buckwheat ($139M).

Russian ruble (RUB) crude oil ($123B), refined petroleum ($66.2B), petroleum gas ($26.3B), briquettes ($17.6B), wheat ($8.14B), semi-finished iron ($6.99B), coal tar oil ($4.49B) ), raw nickel ($4.03B) and nitrogen fertilizer ($3.05B).

South African Rand (ZAR) Gold ($16.8B), Platinum ($9.62B), Automobile ($7.61B), Iron Ore ($6.73B) and Briquettes ($5.05B), Manganese Ore ($3.16B), Chrome Ore ($1.92) B) Titanium ore ($583 million) and niobium, tantalum, vanadium and zirconium ore ($483 million).

Swiss francs (CHF) gold ($59B), packaged drugs ($46.2B), blood, antiserum, vaccines, toxins and cultures ($32.9B), base metal watches ($13.6B), jewelry ($10.9B), precious metal watches ($7.32B), and hydrazine or hydroxylamine derivatives ($501M).

U.S. dollar (USD) refined petroleum ($84.9B), crude oil ($61.9B), automobiles ($56.9B), integrated circuits ($41.4B), auto parts ($41.2B), medical equipment ($29.5B), gas turbines ($28.1 B), Aircraft parts ($16.3B) and orthopedic appliances ($12.1B).

Vietnamese Dong (VND) broadcasting equipment ($42.3B), telephones ($18.2B), integrated circuits ($15.5B), textile shoes ($10.6B) and leather shoes ($6.43B), coconuts, Brazil nuts and cashews ($3.16B)), Fuelwood ($2.05B), cement ($1.39B), metal-clad products ($1.37B) and cinnamon ($175M).

West Africa African Financial Community Franc (XOF) Gold ($11.66B), Cocoa Beans ($3.84B), Refined Oil ($2.64B), Rubber ($1.08B), Raw Cotton ($1.04B) and Crude Oil ($941M), Cocoa Paste (7.95) US$ billion), other oil seeds (US$407 million), phosphoric acid (US$346 million), coconuts, Brazil nuts and cashews (US$280 million), crushed nuts (US$192 million), zinc ore (US$173 million), raw zinc (US$155 million) M), electricity (US$141 million), cocoa shells (US$115 million), calcium phosphate (US$95.7 million), radioactive chemicals (US$59.6 million), logs (US$59.5 million), raw copper ( 49.4 million U.S. dollars), oil and natural gas (42.5 million U.S. dollars), non-fillet frozen fish (356.1 million U.S. dollars), other vegetable residues (25.4 million U.S. dollars) and aluminum ore (3.17 million U.S. dollars).

Data: Economic Complexity Observatory (OEC).

(Bold: The country/economic zone is the world's largest exporter of products in 2019).

For active trading purposes, currencies highlighted in yellow will be described as free-floating and more liquid currencies. Therefore, they will also be easier to obtain and lower transaction costs (lower fees).

For hedging purposes, other currencies will bring some advantages to the commercialization of their related natural resources, even if they are more willing to be regarded as more exotic currencies.

The following is the weekly schedule of some major commodity currencies against the U.S. dollar (reference currency) in the above table:

Each chart is represented in 2 standard deviation Bollinger bands based on 20-period simple moving average (orange), 50-period simple moving average (blue curve), and 200-period simple moving average (black curve), as shown below In the pane is a 14-period relative strength index (blue), with a 9-period simple moving average (red curve) applied.

All these charts show a 2-year historical period.

In the next article, I will highlight some of the possible correlations between key natural resources and their commonly traded currencies.

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All the above articles, research and information represent only the analysis and opinions of the employees and colleagues of Przemyslaw Radomski, CFA and Sunshine Profits. Therefore, it may prove to be wrong and is subject to change without notice. Opinions and analysis are based on data available to the authors of each paper at the time of writing. Although the information provided above is based on careful research and believed to be accurate sources, Przemyslaw Radomski, CFA and their colleagues do not guarantee the accuracy or completeness of the data or information reported. The opinions expressed above are neither an offer to buy or sell any securities, nor a recommendation. Mr. Radomski is not a registered securities adviser. By reading Przemyslaw Radomski's reports, you fully agree that he will not be responsible or liable for any decisions you make regarding any information provided in these reports. Investment, trading and speculation in any financial market may involve high-risk losses. Employees and affiliates of Przemyslaw Radomski, CFA, Sunshine Profits and their family members may hold short or long positions in any securities, including those mentioned in any reports or articles, and may additionally purchase and/or sell these securities, Without notice.

The euro/dollar is bearish again and extended its decline to 1.1300 in early US trading. Supported by stronger-than-expected October retail sales data and tough Fed comments, the rise in US Treasury yields seems to be boosting the dollar. 

GBP/USD lost momentum in the US early trading and gave up daily gains, staying flat above 1.3400. Due to the Fed’s hawkish comments and the rise in U.S. Treasury yields, the U.S. dollar strengthened again, which made the currency pair unable to maintain its recovery momentum.

Gold hit a new multi-month high of US$1,877.15 per troy ounce, which was the last level in June this year, cutting intraday gains and returning to the 1,850 price zone before the opening of Wall Street. 

As the XRP price corrected 10% in just two trading days, today's Ripple price is under pressure. XPR prices are currently seeing earlier support, but the tailwind is beginning to fade. Expect shorts to go further lower to maintain another 8% drop.

Economists expect the UK inflation rate in October to be 3.9%. It takes a surprise of 4.5% or higher to push the pound higher. A figure close to 3% will make people suspicious of interest rate hikes and depreciate the pound.

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