Comdolls is a nickname for the term “commodity dollar”.
Currencies like the Australian, Canadian, and New Zealand dollars are known as “comdolls” because their respective economies are highly dependent on exporting commodities.
Commodities are used as materials in the production of goods or services.
Australia is a large exporter of iron ore and other minerals, New Zealand’s economy is strongly tied to dairy, meat, and wood production, and Canada is known for its significant oil exports.
Because of this, their currencies often move in relation to the prices of these respective commodities.
For instance, if the price of oil rises, the Canadian Dollar tends to appreciate because higher oil prices mean higher revenues for Canada’s oil industry, which can strengthen the currency.
Conversely, if commodity prices fall, the value of these currencies often decreases.
For this reason, forex traders who trade these currency pairs often keep an eye on commodity prices to predict movements in these currencies.