Commodity currencies continue to gang up on the buck as the recession becomes shallower and commodities pick up as more global growth and demand starts to pick back up.
Also, investors are betting on inflation coming in the future and are positioning themselves ahead of time. To do that in currencies, there’s no better picks than these commodity currencies vs. the buck. It’s a “double whammy”.
The dollar gets pummeled when commodities and inflation rise while at the same time the Aussie, New Zealand and Canadian dollars get the “wind to their backs” when this happens.
So the AUD/USD and NZD/USD long and USD/CAD short get “blessed” doubly during these times like we’re experiencing now.
Recently, some of the moves that have taken my account to new highs have been plays on the Aussie dollar vs. the U.S. dollar and yen (being long AUD/USD and AUD/JPY).
Australia is one of the clear fundamental winners even amongst the commodity currencies. The trends have been clear and they’ve been strong.
Of course there will be pull backs along the way, and they could be volatile and violent. However, look for the uptrend to resume each time these huge pull backs happen.
Sean Hyman
0 comments
Post a Comment