There have been dramatic gains for major commodities so far this year which will impact currencies and there could be some dramatic moves.
Oil jumped by more than $16 from its 2021 close to this year’s peak, base metals have surged with iron ore gaining 19%, while copper has vaulted 10k and palm oil has hit a record high.
Liquefied natural gas has tumbled but is still four times more expensive than it was in March 2021. Likewise natural gas prices remain highly expensive despite a dramatic dive from a high touched in late January. Coal prices have rocketed.
These commodity gains are not factored in by currency traders who have established a big bet that the Australian dollar falls, hold few bets on rises in the Canadian dollar, have purged investments in Russia’s rouble and have next to nothing invested in Mexico’s peso or Brazil’s real.