Research: Minimizing Portfolio Risk with Commodity Currencies

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Hedging Portfolio with Commodity Currencies

By Erik Norland, Senior Economist, CME Group

Highlights:

  • Commodity currencies are positively correlated to commodities
  • The correlation offers opportunities to minimize portfolio risk
  • Commodity currencies often have positive ‘carry’ versus U.S. dollar
  • Commodities usually have negative carry due to storage, other costs