Commodity Currency Definition | CFI

commodity currency

Commodity currency refers to the types of currencies that move in parallel with the price of global commodity products like raw materials and natural resources such as agricultural goods.

 

In the foreign exchange markets, commodity currency refers to currencies such as the South African rand and the New Zealand Dollar.

 

One of the key features that make investing in commodity currencies so appealing to foreign exchange traders is that they can provide a more accurate estimate on the value of the currency and are also able to predict the movements within the markets based on the value of the underlying commodity.

 

Key takeaways:

  • Commodity currency refers to a type of currency that moves with the prices of global commodity products.
  • Currencies of countries like South Africa, Tanzania, and Brazil are tied to commodity products.
  • There are pros and cons attached to commodity currencies and this will depend on the price fluctuations in exports.
  • Foreign exchange traders enjoy trading commodity currencies as they can provide accurate value estimates and can easily predict market movements in the currencies by looking at the value of the commodities.
Credit Financier Invest (Mauritius) Ltd is an award winning global financial markets provider with over 23 years of experience and regulated entities in several jurisdictions, focused on offering impeccable execution and trading conditions including very low spreads, professional services, dedicated support and powerful tools.
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We would like to remind that while we endeavour to provide best possible services, CFI provides execution only services and any information, reports, opinions, commentary or other materials he receives from CFI directly or from its employees or through any analytical tools provided to him or third party research provided to him from the Company shall not be deemed as investment advice and it cannot be relied upon to make investment decisions. The Client commits to make his own research and from external sources as well to make any investment. The Client accepts that CFI will not accept liability for any loss or damage, including without limitation to, any loss of profit, which may arise directly or indirectly from use of or reliance on such information. The contents of any report provided should not be construed as an express or implied promise, as a guarantee or implication that clients will profit from the strategies herein, or as a guarantee that losses in connection therewith can, or will be limited.


Forex and CFDs are leveraged products that incur a high level of risk and a small adverse market movement may expose the client to lose the entire invested capital. The vast majority of retail client accounts lose money when trading in CFDs. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. The possibility exists that you could sustain a loss in excess of your deposited funds even if a stop loss is used and therefore, you should not speculate with capital that you cannot afford to lose and be aware of trading risks. Credit Financier Invest (Mauritius) Ltd provides general information that does not take into account your objectives, financial situation or needs. The content of this website must not be interpreted as personal advice. Please ensure that you understand the risks involved and seek independent advice if necessary.

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