Commodity Currencies Surge on North Korea Tensions
By Richard Cox
Geopolitics continues to jar markets and make its influence felt on investors looking for safe haven protection during times of economic uncertainty. The stock market in the United States continues to trade at its record highs and this has made it difficult for many investors to identify growth and value opportunities in the process.
But now that we have seen a seemingly endless stream of negative headlines surrounding the escalating conflicts between the US and North Korea, it would not be surprising to see investors establish a more protective stance for their assets. This is why the commodity currencies like the Australian Dollar have surged in recent weeks, as the Australian economy is a significant exporter of things like copper and other industrial building materials. These are trends that could continue well into next year.
Rising Values in Aussie Dollar
Those that are looking to capitalize on these trends can use an online trading account to buy and sell the Australian Dollar against many of the currency counterparts that make up its base. This will include currencies like the Japanese Yen, British Pound, Euro, and US Dollar.
In terms of the commodity currencies, another option is the Canadian Dollar. Canada is another region known for significant commodities exports but these generally tend to focus on things like oil and gold. In any case, we expect both the CAD and the AUD to continue show upside gains given the fact that they are heavily positioned in the global commodities base that is likely to benefit from the rising military tensions that are progressing between North Korea and the United States.
Gold and Safe Haven Assets
If these market trends continue, traders should consider moving into the commodity currencies or in precious metals assets. Today’s online trading accounts offer many different strategy outlooks for those that want to invest in these parts of the market. This is not entirely uncommon for the gold and silver investor, as these assets will often show strong gains if the stock market is falling or if there are military tensions in areas like the Middle East.
But while it may seem as though these are purely market negatives, there are still many ways for investors to capitalize on the different reactions that we likely to be exhibited by the majority of the market’s investors. The best way of taking positions here is to use an online trading platform, as this can greatly diminish costs and cut out many of the middlemen that would traditionally be needed in order to buy gold and silver assets. Through history, these assets have taken the form of gold coins, gold bars, and gold bullion but today’s digital trading platforms offer many more options for investors of all experience levels.