Positive Correlation of Foreign Exchange
Positive correlations of foreign exchange are when two or more asset classes (currencies, commodities or stocks) move in the same direction, either up (appreciating) or down (depreciating).
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The Pound and Crude Oil
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The Pound and crude oil. One of the most common positive correlations in foreign exchange is the correlation between British pounds (GBPs), U.S. dollars (USDs), and crude oil prices. So if the GBP/USD is appreciating then a commodity trader would take a long position on crude oil. New Zealand dollars (NZDs) and USDs also have a positive correlation with oil.
Australian Gold
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Track gold through the Australian dollar price. The same is true of the currency pairs of the Australian dollar (AUD) and the New Zealand dollar. If the AUD/USD is appreciating, you should not only go long in the AUD/USD but also in the NZD/USD as well. Interestingly enough, the AUD/USD also has a strong, positive correlation with gold.
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Stock Index
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Stock exchange indexes can have a positive correlation with currencies. There are some currency pairs which also have a strong correlation with the S&P 500. For example, when the S&P index goes up, several currency pairs also appreciate. The strongest correlation is the NZD/USD closely followed by AUD/USD and the Euro dollar (EUR) and the USD.
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References
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