Commodity Currencies Lose Their Luster

Excerpt from our One Page Annotated Wall Street Journal Summary (receive it by email every morning by signing up here):

Some Currencies Get Hit as Prices Of Resources Fall

Summary: The CRB Index is down 15% since its mid-May peak; casualties include oil (-21% since July 14th), natural gas (-59% in 2006), gold (-18% from 12-month high) and copper (-14% since May). Commodities rich economies that have done well during the boom are beginning to feel tremors in local currencies: the Canadian dollar, up 42% since 2001, is down 1.7% since hitting a high in June, and the Australian dollar up 48% since 2001, is down 2.6% from its high in May. Chile's strength in copper resulted in 22% currency appreciation against the dollar since the end of 2001, however Chilean central bank recently lowered its 2006 GDP projections due to the fall in copper prices and the peso fell from a peak of 510 to the U.S. dollar to about 540. Full WSJ article >
Related links: When Diversification Just Isn't Enough • Morgan Stanley Expects Sharp Australian Slowdown • Outlook for Copper Far From Rosy • Bloomberg: Australian Dollar May Fall on Global Economic Slowdown Concerns

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