Originally published by Deriv on 15 September 2022
When a country’s economy relies heavily on exporting a specific raw material, or commodity, its currency tends to move in line with the price of that commodity. Such currencies are referred to as commodity currencies.
The three primary commodity currencies are the Australian dollar (AUD), Canadian dollar (CAD), and New Zealand dollar (NZD). These currencies belong to countries that are major global producers and exporters of commodities, and their values are closely linked to commodity prices. While these are influential currencies, they are not necessarily considered major forex pairs.
In the first half of 2022, commodity markets experienced significant volatility due to geopolitical tensions. Traders had to adapt their strategies to navigate these unpredictable conditions effectively.
Let’s take a closer look at the main commodity currency pairs and how to incorporate them into your trading strategy.
Understanding the Top 3 Commodity Currency Pairs
1. US Dollar / Canadian Dollar (USD/CAD)
Canada ranks among the world’s top five oil producers and exporters and maintains strong trade ties with the United States. Most of its exports go to the US, meaning the country earns significant USD revenue through oil sales. Consequently, oil prices have a major influence on Canada’s economy and the CAD. Typically, rising oil prices lead to a stronger CAD.
Trading tip: Compare oil price charts with CAD trends. Look for support, resistance, and patterns. If there’s a sudden oil price movement not yet reflected in the CAD chart, the currency is likely to follow. Similarly, if your analysis predicts a rise in oil prices, the CAD could also increase in value.
2. Australian Dollar / US Dollar (AUD/USD)
Australia is a leading gold exporter, and its revenue is heavily influenced by gold prices. The AUD shows roughly an 80% correlation with gold.
China, a major global manufacturing hub, is Australia’s largest trading partner and often prefers Australian resources due to their quality and proximity. As a result, Australia’s economic performance is closely tied to commodity prices.
Trading tip: Track gold prices alongside updates on China’s economic and political landscape. Rising demand from China for Australian commodities can boost exports, which may lead to an appreciation of the AUD.
3. New Zealand Dollar / US Dollar (NZD/USD)
New Zealand is the world’s largest exporter of dairy products and also exports significant amounts of meat and wool. The value of the NZD fluctuates according to the prices of these commodities, which determine national revenue.
Major importers of New Zealand commodities include Australia and China, so the NZD is also influenced by the economic performance and demand from these countries.
Trading tip: NZD/USD and AUD/USD are closely correlated due to geographic proximity and trade links between New Zealand and Australia. Comparing the price trends of these pairs can help inform trading decisions.
Commodity Currency Pairs Available on Deriv
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Here’s a polished rephrasing of your text:
When trading commodity currency pairs, it’s essential to study the underlying commodities from the relevant countries—their price patterns, trends, and key influencing factors—before entering a trade. If you’re still considering whether to include these pairs in your portfolio, you can practice trading them risk-free using a demo account, which comes preloaded with 10,000 USD in virtual funds.
FAQs
What are commodity currency pairs?
Commodity currency pairs are forex pairs whose values are closely linked to the price of a specific commodity. Common examples include the Australian dollar (AUD), Canadian dollar (CAD), and New Zealand dollar (NZD).
How do commodity prices impact these currency pairs?
Changes in commodity prices can directly influence the exchange rates of commodity-linked currencies. When commodity prices rise, the currency of the exporting country often strengthens. Conversely, when prices fall, the currency typically weakens.
Are commodity currency pairs more volatile than other forex pairs?
Yes. Commodity currency pairs tend to be more volatile than major forex pairs because they are affected by fluctuations in commodity markets.
What risks are involved in trading commodity currency pairs?
Trading these pairs carries risks such as price volatility from commodity markets, geopolitical events, and unexpected economic data releases. It’s important to implement a solid risk management strategy when trading commodity currencies.
If you want, I can also make an even more concise, trader-friendly version that’s optimized for quick reading and actionable insights. Do you want me to do that?
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Open Account
Not profitable? Don’t worry! Join our copy trading system where we provide lower risk returns. Benefits of Joining Us:
-Lesser Risk as lot size is minimal
-Higher returns (approx. 5% to 10% monthly)
-Easy Deposit and Withdrawal with USDT using crypto wallets
-Lesser Drawdown
-Instant Support
-Invest Now and get guaranteed returns with us. DM us for more info❤️
-Start Now
*Copy Trading is free but we charge some percentage of profit as fees.*
Full VIP signals performance report for September 22–26, 2025:
