Commodity currencies may soon see a boost in FX trading. China is considered one of the major economic up and comers, and with it comes vast amounts of money to spend. China has already expressed an interest in diversification, and that country's new investments could especially benefit commodity currencies.
Kathy Lien describes the possibility that China will boost commodity currencies in FX360:
Because of their reliance on commodities, such as oil, gold and other tangible assets, down under currencies and the Canadian dollar do well when trade centers around these things. And with China looking for better returns and a more diverse investment portfolio, it might mean better news for commodity currencies -- and a weaker U.S. dollar in the future.To go out means to look for investment opportunities abroad and by making these comments, China has officially announced that they will be embarking on a spending spree. For investors looking for buying opportunities, they should buy what China buys. In terms of currencies, the most basic need that China has is commodities and their demand could provide support for the Canadian, Australian and New Zealand dollars.
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