Interest rates, not commodities

Posted by Scriptaty | 1:04 AM

We are left with one overarching theme: No matter the structure of a country’s economy or the source of its export revenue, we should expect its currency to trade not as a function of commodity prices but rather as a function of interest-rate differentials.

In other words, there really are no currency proxies for commodities, and those who trade the CAD or AUD off the day’s movements in commodities are unlikely to profit by doing so.

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