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Hardy: How I'm trading commodity currencies as gold & oil prices tank
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With WTI crude trading close to USD 50 and gold hitting a five-year low, Saxo Bank’s John Hardy says low commodity prices are starting to be felt in FX markets. If prices continue to tank, it could have big implications, he says.
Commodity currencies like CAD and NZD have already been hit by the slump in commodity prices and, Hardy expects AUD could be next, saying the market is complacent about the Reserve Bank of Australia’s desire to see a weaker Aussie.
Hardy has paired four commodity currencies with the G4, and looks at how they could be traded as low commodity prices starts to drive inflation down which could impact monetary policies.