Commodities are very idiosyncratic markets. Their price fluctuations can depend on multiple factors such as supply/demand dynamics, seasonality, geopolitics, financial markets, interest rates and, last but not least, currency markets. That’s right, the foreign exchange market plays a crucial role when it comes to commodity markets but in some countries the influence can be reversed: the commodity markets can impact the fluctuation of the currency markets. This phenomenon is true for those asset classes considered to be commodity currencies. Commodities currencies are those markets whose dependence on certain commodities is so big that any shock in the commodity market has repercussions on the fluctuations of the national currencies. Some classic examples are the Russian ruble and crude prices (being Russia a big oil producer), gold prices and Australian dollars (being Australia a big gold exporter) or Japanese yen and natural gas prices (being Japan a big importer of natural gas). The present research digs deeper into these relationships. This research was published on the Medium platform a few years ago but it is still valid today. Please click here to read the rest of the research.