This would translate to risks for more losses in the global markets, stretching as far as European equities, oil and
commodity currencies.
The sharp decline in nearly all commodity prices and the weakening in
commodity currencies creates headwinds for oil demand in the commodity producing emerging markets in Latin America and the Middle East.
The bearish Chinese data has added to worries about a 40 per cent slide in iron ore prices this year and further soured sentiment for
commodity currencies.
These four currencies are generally known as
commodity currencies.
However, investors are wary that a supply shock could hurt global recovery prospects and hit the less-liquid and riskier
commodity currencies at first.
growth are supportive for commodities and weakening
commodity currencies are providing a fillip for the miners," it wrote in a note.
Com
Commodity currencies, are currencies of countries that heavily depend on commodity exports.
Of the three main EM
commodity currencies (BRL, ZAR, RUB), RUB has better fundamentals.
The latest IMF reserves data shows that central banks allocations to the Euro have now fallen below 24 per cent at the expense of A
commodity currencies such as the Norwegian kroner, Australian dollar and the Canadian dollar.
The weakness in currencies last week was in
commodity currencies and the Yen.
The recent falls in
commodity currencies, including the Australian dollar, show how volatility in global markets could present trading opportunities for forex traders.
The yen advanced while the dollar strengthened versus
commodity currencies as Wall Street's biggest sell-off since December 2008 prompted a massive flight to safety.
