The price of oil affects the industry of countries and their currencies, which is favorable to all those who are engaged in speculative activities trade on the forex. Prediction next movement in the market is the key to making money, but this simple concept is practically very difficult to apply in practice. This is due to numerous factors that influence the global market, supply and demand, political international relations, economic growth, interest rates and others. However, some of these factors, such as economic and business growth in the state, is directly dependent on industrial development, which still depends on what will be the price of oil on world financial markets. This leads to the conclusion that the price of oil in direct correlation with the values of currencies state, which depends on the industry and economic growth. Of course, this correlation can be positive or negative depending on whether a country is a major importer or exporter of oil, but no matter, the oil price has a significant impact on currency countries. Otherwise, oil prices affect most currencies highly developed countries, which include the US Dollar, Canadian Dollar, Japanese Yen and the like. Practically, if a trader in the forex market tracks the changes in oil prices and its impact on a particular currency, the relationship between the currencies traded the most, can be achieved quite a good profit on forex
The price of gold in the stock market can best be traced to the most important and largest market of gold in physical form, and that is London market LBMA (London Bullion Market Association) on which are traded in gold and its derivatives. For trading on the international financial market is particularly important that the gold powerful investment tool because it is treated as goods for themselves, but also as an important factor that strengthens and weakens currency countries that produce it (especially the sensitive AUD Australia because it is the world’s leading manufacturer gold). As a result, the price of gold on the stock market depends on a number of intricate factors, which are the subject of the speculators, be it on to investors in the stock market or gold in global financial markets. Since the central bank kept huge amounts of gold as part of their reserves (about 15% of total reserves in gold, as measured by trillions of US dollars), the gold price on the stock exchange and is a reflection of all important decisions of banks for a further increase or decrease in gold reserves, which is also one of the key variables for the price movements of currencies. Otherwise, trading in forex is a highly significant correlation between the gold price on the stock market and the price of currencies. It is notable that this relationship very volatile, because the price of gold depends on many complex factors.
Professional Forex trader-and pay special attention to the fact that the global currency market is influenced by many factors: supply, demand, political conditions, interest rates, economic growth, and many others. So try that as early as possible, on these indicators collected as much information. Economic growth and exports are closely related to domestic industrial production, and it is not surprising that some of the major world currencies in direct correlation with certain goods.Currencies that are closely linked to commodity, Australian Dollar, Canadian Dollar and New Zealand Dollar. Swiss Franc and Japanese Yen are also sensitive to currency movements of commodity prices but less pronounced.
When the US dollar becomes stronger the euro, pound and yen becomes weaker and vice versa.
Oil and Canadian dollar
Canada is a country that is the seventh for oil production in the world. It is estimated that the size of Canada’s oil reserves right behind the reserves of Saudi Arabia. Geographical association and political crisis the Middle East have caused that Canada becomes the main oil supplier to the US. It is no wonder why the Canadian national currency extremely associated with the movement of oil prices in the market. Their economy has suffered a strong shock when oil prices dropped by almost 70% in February 2009, while Japan, as a major importer of crude oil, significantly strengthened by this development market. Between 2006 and 2009, correlation chart oil price trends and chart the Canadian dollar, was extremely high, close to 80%. Practically, the price of oil acts as an indicator of trends in the exchange USD / CAD, which means that when the price of oil rises, the ratio USD / CAD falls and when oil prices decline, the ratio USD / CAD is on the rise (CAD numerous currencies).
Oil and Japanese yen
Japan is a country that is in the lack of its own energy sources the largest importer of oil, natural gas and other fuels, just behind the US and China. 2008. Japan has made imports of primary energy over 84%, of which 49% import crude oil, as the economy of Japan seems particularly sensitive to oil price movements. Therefore, when the price of oil rises, the Japanese economy has increased the requirements for preserving the stability of its national currency. By observing the currency pair CAD / JPY as relations between exporters and importers, where the graph of price movements of oil acts as an indicator, we can bring a number of useful conclusions and decisions for future trade activities.
Gold and Australian Dollar
Trading the Australian dollar, which basically has the same dynamics as well as trading in gold. Australia is the third country in the world in production of gold, so that the positive correlation between gold and the Australian dollar reached 84% and lasts from 1999. Generally, this means that when the price of gold increases, the value of the Australian Dollar.
Gold and Swiss Franc
Swiss neutrality policy makes their national currency reasonable choice in times of political crisis and instability. In the period from 2006 to 2009, the currency pair USD / CHF and motion chart of gold price achieved 77% positive correlation. If you plan to trade some of these commodity currencies, it is advisable to follow the parallel movement of the price of oil and gold and observe a speed limit interact.
Due to a slight delay reaction of the currency market, in response to the movement of prices of these goods, there are great opportunities for good overview and timely response to market demand, and therefore the placement of profitable trade orders. The ability to predict trends and market development is crucial for the success of each trade. This is particularly important when it comes to trading currencies Knowledge of the close integration of currencies and commodities can significantly improve the understanding and prediction of further trends and developments. The US dollar rose against other major currencies after the comments of the President of the New York Fed’s William Dudley and the minutes of the last meeting of the Fed. Forex pair EUR / USD slipped to 1.0500. It was published growth in the number of unemployed in the US, who have applied for initial help, during the last week to 281,000 persons from 267,000 in the previous week, while analysts expected growth at 285,000.The dollar strengthened after President New York Fed, William Dudley said that the timing of interest rate increases depend on economic data, adding that the increase in June and still possible if the recovery of the labor market remains strong. FED Governor Jerome Powell said he is willing to start tightening monetary policy despite the current low levels of inflation and added that Central in March could take these steps in June, if the economic data over the next two months show that the recovery remains on the right track. Yesterday was published the minutes of the March meeting of the Fed which showed that several officials believe that the economic outlook is likely to justify an increase in interest rates in June. The pound fell against the dollar. GBP / USD dropped to 1.4789. The Office for National Statistics today announced that the trade deficit of Great Britain rose to 10.34 billion pounds in February from 9.17 billion in January, while analysts expected a drop to 9.00 billion pounds. The Bank of England kept its key interest rate in April to a record low of 0.50 percent, which was in line with forecasts. The dollar was steady against the Japanese yen and the Swiss franc. USD / JPY jumped to 120.06, and the EUR / USD climbed to 0.9706. USD / CAD was slightly fell to 1.2541, AUD / USD climbed to 0.7724 and NZD / USD rose to 0,7589. Broj building permits issued in Canada fell in March by 0.9 percent after falling 12.3 percent in the previous month, while analysts predicted growth at 5.0 percent. Price Index of new homes in Canada rose last week by 0.2 percent after falling 0.1 percent in the previous week. Economists had expected growth of 0.1 percent. Index of dollars increased by 0.36 % 98.62.
When the US dollar gets stronger the price of gold, silver and oil dropped and vice versa.