In forex, what are the commodity pairs?

By Investopedia Staff AAA
A:

In forex, the commodity pairs consist of the heavily-traded currency pairs and contain the Canadian, Australian and New Zealand dollars as part of the pairing. The three commodity pairs are: USD/CAD, AUD/USD, NZD/USD. These pairs are highly correlated to commodity fluctuations in the world markets and are the most heavily traded commodity pairs in forex.

Forex traders often trade these commodity pairs to gain exposure to commodity (especially oil) volatility. Although there are many countries with large natural resource and commodity reserves, such as Russia, Saudi Arabia and Venezuela, the commodities of many of these nations are usually highly regulated by their domestic governments or are thinly traded. The Canadian, Australian and New Zealand dollars are traded at high volumes and are therefore very liquid in the forex market.

For more, see Canada's Commodity Currency: Oil And The Loonie.

This question was answered by Lovey Grewal.

RELATED FAQS

  1. Are Downside Tusuki Gap patterns important when trading forex pairs?

    Find out why forex traders use candlestick charting for currency pairs, and learn how the Downside Tasuki Gap pattern can ...
  2. What is the difference between pips, points, and ticks?

    Learn the differences between points, ticks and pips and how each are used by investors to measure price changes in stocks, ...
  3. What is the difference between extensive margin and intensive margin in economics?

    Find out why it is important for traders to understand the difference between initial margin requirements and maintenance ...
  4. What commodities are not tradable?

    Learn about some of the durable and consumable goods that are not considered tradable commodities and why these goods cannot ...
RELATED TERMS
  1. Benchmark Crude Oil

    Benchmark crude oil is crude oil that serves as a pricing reference, ...
  2. Christmas tree (oil and gas)

    A vertical assembly of mechanical elements used in oil exploration ...
  3. N.V. (NV or Naamloze Vennootschap)

    An acronym for the Dutch phrase Naamloze Vennootschap, a public ...
  4. FPSO (Floating Production Storage and Offloading)

    Acronym for Floating Production Storage and Offloading. FPSO ...
  5. Day rate (oil drilling)

    In oil production, a day rate is the amount a drilling contractor ...
  6. ICE LIBOR

    See LIBOR

You May Also Like

Related Articles
  1. Forex Education

    Are Downside Tusuki Gap patterns important ...

  2. Mutual Funds & ETFs

    Want to Go Long Natural Gas? Eye the ...

  3. Chart Advisor

    These Oil Service Stocks Are Ready For ...

  4. Chart Advisor

    Watch Out Below For Falling Lumber Prices

  5. Mutual Funds & ETFs

    What companies are positioned to grow ...

Trading Center