COMMODITIES AND CURRENCIES IMPACT ON STOCKS

In a traders search for edge in trading stock indices, the price of certain commodities and currencies will affect different indices in different ways.

Some smaller indices such as the Scandinavian markets keep a close eye on the price of timber. The price of coffee will move the markets in many developing nations. But for most industrialized nations, the most important commodity to watch is crude oil.

Most major currencies affect their local markets in different ways. The euro, the US dollar, the Chinese Yuan, the Japanese yen, the Swiss franc, and the British pound sterling all impact stock indices. One of the most significant single price moves in the equity indices was caused by the devaluation of the Chinese Yuan.