Your Best Commodity Currency

Daniel Acker | Bloomberg | Getty Images

Traders work in the ten-year U.S. Treasury Note options pit at the Chicago Board of Trade in Chicago, Illinois, U.S.

Here's one strategist's take on how to choose between the Canadian, Australian, and New Zealand dollars.

When commodities are on the move, the so-called commodity currencies - those from big commodity-exporting countries - tend to be moving too. The question is, how do you choose between the Canadian, Australian, and New Zealand dollars?

The strategists at RBC Capital Markets have some ideas.

"Investment horizons are important here, and although our view is for CAD to enjoy more sustainable gains in the longer term, the extreme divergence in interest rate expectations is prone to correct in the shorter term," they wrote in a note to clients. "In that scenario, CAD has the most to lose, AUD the most to gain, and NZD somewhere in between."

The RBC strategists also argue that fears of a hard landing for China's economy are overblown, and that should also benefit the Australian dollar. They are long the Aussie against the New Zealand dollar, and also against the Canadian dollar.

Food for thought.

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MULTI CURRENCIES v The Dollar

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