Shippng Index Bounce Back

An interesting chart today depicts the strong relationship between the Baltic Dry Index (a global gauge of raw-material shipping costs) and the value of those three resource-rich countries' currencies, including Norway's kroner, Australian dollar, and Canadian dollar.

The commodities prices are very depressed currently as the ecnomic crisis deepened and the gloomy outlook for the global growth. However, the underlying fundamentals related to the supply and demand side of commodities have not changed much, which should provide a long-term support for commodities. Since the beginning of the year, the Baltic Dry Index have jumped by more than 100 percent. if the trend is sustainable and resilient in the next three months, then we should expect the bounce back of the commodities prices from their current extremely low levels compared to historical standard and benefits the currencies linked to them.