Closing the Gap - Futures Edition

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Australian Dollar - A Commodity Currency

Closing the Gap - Futures Edition

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Tom, Tony, and Pete discuss how we can trade the Commodity Index ETF DBC. DBC is a commodity Index ETF that holds Gasoline, Crude Oil, Gold, etc. With the Australian dollar /6A having a strong 1 to 1 correlation with FXA and FXA having interesting correlations with the products comprising DBC. We look to place a pairs trade between DBC and FXA.

The Australian Dollar has had a 14% upside move, and the RBA (Reserve Bank of Australia) has kept its cash rate unchanged to further boost the labor market and inflation. These conditions are creating a tradeable highly volatile market.

Major Makeup of DBC:

• Gasoline – 13%

• NY Harbor ULSD – 13%

• WTI Crude – 12%

• Brent Crude – 12%

• Gold – 8%

• Agricultural products – 16%

• Other Metals – 17%

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