Latest developments in the intrinsic value of the currencies are new and significantly varying from the past. The 2008 crisis has resulted in a flight to risk that overvalued US dollar against other currencies. We now see the opposite as trade flows picks-up and Gross domestic product growth trend becomes positive in most parts of the world. But a improvement in the job market in America, with global growth created largely by developing nations had resulted in big variations in the values of the currency. Nations blessed with minerals and natural resources like oil have done well from the rise of China, the rise of its city-dwelling working class, its appetite for energy, commodities, food and its determination to build infrastructure.
Comparing the period of March – June 2009 with June- July 2010, the New Zealand Dollar and the Aussi have appreciated respectively 32% and 30% versus the Euro. Farming and natural resources – predominatly minerals translated to 37.6% and 4.6% of Australia’s exports. China is Australia’s biggest export market at 42.5 billion in 2009.
Among the developing nations there are many other currencies that have shown appreciation in value. These include - South African Rand, Colombian Peso, Canadian Dollar, as well as the Brazilian Real. The Canadians are has the second biggest oil reserves of oil and gas globally - 179 billion of barrels, currently the biggest oil provider for the United States (it provides 22% of the American consumption) and the safer, investment-friendlier maker among the other top producers (Mexico, Saudi Arabia and Venezuela). Canada not only has energy but also provides the grain and fertilizer to feed the increasingly wealthy population of the emerging markets – Needs that increase faster than the population / GDP growth as a wealthy consumer shifts from grains to meat . The Canadian dollar has appreciated 21% versus the Euro in the mentioned period.
Oil and natural reserves have also helped Brazil. Lately they found an oil reserve that could be the largest after the Kazakhstan find in 2000. It is projected at 2-5 billion barrels. Brazil is also a leader in alternate energy – predominantly bio-fuel. Agriculture has also caught up in growth with production in soya using innovative genetic engineering indicating tremendous results. Brazil is the first country to be able to compete with the big five (United States, Canada, Australia, the EU and Argentina). Farm production value has increased from 23 billion reais to 108 billion reais (365%) between 1996 and 2006, its exports of beef have multiplied by 10. Brazil is now the biggest exporter of Beef, poultry, sugar cane and ethanol.
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