Chinese Forex Reserves
Trading Forex-Russian Ruble, the Commodities Currency Next
There are some coins known in financial circles as "products basic currency. His fortune appears to be increasing in tandem with falling prices of raw materials. These are the "other dollars" CAD, AUD and to a lesser degree, NZD.
These countries are major producers and net exporters of a wide range of physical commodities. Oil and gas, metals, forestry and a myriad of agricultural products are imported from those countries by the rest of the world, in particular by exploiting the economies of Asia. Growing consumption is followed rapidly rising prices of such materials. That, in turn, pushes the currencies of exporting countries to appreciate in value.
Huge run ups in AUD, CAD and NZD in recent years were the direct result of this phenomenon.
That there is Russia. Since the disintegration of the Soviet Union and virtual collapse of its economy, many changes have taken place. Privatization and brought much needed capital improvements. Obsolete plants were closed or modernized. Rising commodity prices Russia took the top level of world exporters in many if not most industrial raw materials. (Let's ignore the political situation in Russia and impact on this discussion.)
Second largest exporter of oil and natural gas exporter. When it comes to metals which are the main producers of nickel, palladium, titanium, cadmium, tungsten. Russia is a very high place in the production of copper, aluminum, steel, gold, silver and a long list of other metals. The same applies to the wood. We must also remember that only a small portion of natural resources has not been used or even properly assessed. Within years, Russia's currency reserves increased from about 70 billion to more than 400 billion as of this writing, and growing.
Russian Ruble (RUB) responded very favorably to these events. It appreciates in value against USD from 32 / $ 25 / $ since 2004. Of course, money is not a completely free trade. Very few brokers they offer, the spread is wide. Definitely not a tool for active trading. The lack of historical data makes it difficult to set targets and carry out any significant technical analysis. It is nevertheless much more accessible and more freely floating yuan then Chinese.
Long term traders, with a taste for the exotic, you might want to pay attention to RUB. With the ever increasing volume and the increasing need for raw materials, who knows? Maybe in 5-6 years, the stature of NZD or AUD.
About the Author
Mike P. Kulej is a Chief Forex Strategist for Spectrum Forex Llc. He specializes in mechanical trading systems as explained on www.spectrumforex.com . Spectrum Forex LLC offers numerous services to individual traders. He also publishes trading blog www.fxmadness.com . With questions and comments e-mail him at kulej@spectrumforex.com.
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