Commodity Currency

A Commodity Currency is the currency of a country whose economy is heavily reliant on the export of primary commodities, causing the currency's value to exhibit a strong, positive correlation with the global prices of those commodities. These currencies, such as the Australian Dollar (AUD), Canadian Dollar (CAD), and New Zealand Dollar (NZD), act as a proxy for the underlying commodity markets, making them highly sensitive to shifts in global supply, demand, and risk appetite.