AUD Australia is 3rd biggest gold producer, sailing out about $5 Billions per year. 80% positively correlated
NZD
New Zealand ranks 25th largest producer of gold.
Dollar Index (DXY) during economic unrest, investors dump dollar in favor of gold. Unlike other assets, gold maintains its intrinsic value. USD Negatively correlated versus Gold
USDCHF is Negatively correlated versus Gold. 25% of Switzerland’s reserves are backed by gold. As gold prices goes up, the pair moves down (CHF is bought).
CAD Canada is 5th largest gold producer, as gold price goes up, the pair tends to move down (CAD is bought)
Gold and Euro are considered “anti-dollars,” if the price of gold goes up, EUR/USD may go up as well.
Crude Oil
USD/CAD
Canada is one of the top oil producers, exports around 2 million barrels per day to U.S. that is why CAD is 92% Negatively correlated versus Oil. [Currencies of oil producing countries like Canada and Norway tend to strengthen alongside oil prices?] also AUD/USD tend to correlate with oil.
Bond yields
Local Currency
Bond is sort of ‘I owe you’ (IOU) instrument, if 10-year bond yield is bullish the local currency is bearish. Higher returns on bonds attract more investments. This makes local currency more attractive than that of another economy offering lower returns on its bonds.
The performance of the U.S. economy is closely tied with Japan.
Nikkei
Investors consider the yen as a safe-haven and tend to seek it during periods of economic distress.
USD Pairs:
[GBP/USD, AUD/USD, NZD/USD and EUR/USD] are positively correlated. Change in one pair will affect all other pairs positively by going in same direction.
[USD/CHF, USD/JPY, and USD/CAD] they all are Negatively correlated versus USD. Change in Base currency-USD will affect all counter currencies GBP, JPY, and CAD go in other direction.
Positively correlated: EUR/USD trends up or down, so too does GBP/USD 80-90%
Euro :Negatively correlated
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