New financial markets and their impact on raw material prices

The purpose of the study was to determine the impact of the Chinese financial market, which is a new market, on the exchange rates of commodity currencies and, thus, the prices of raw materials. For this purpose, an autoregressive distributed lag model (ARDL) was used. The results indicate that the...

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Bibliographic Details
Published inAnnales Universitatis Mariae Curie-Skłodowska. Sectio H. Oeconomia Vol. LIII; no. 3; pp. 85 - 92
Main Authors Szturo, Marek, Włodarczyk, Bogdan
Format Journal Article
LanguageEnglish
Published Maria Curie-Skłodowska University Press 2019
Wydawnictwo Naukowe Uniwersytetu Marii Curie-Sklodowskiej
Subjects
Financial Markets
raw material markets
commodity currencies
financial markets
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Summary:The purpose of the study was to determine the impact of the Chinese financial market, which is a new market, on the exchange rates of commodity currencies and, thus, the prices of raw materials. For this purpose, an autoregressive distributed lag model (ARDL) was used. The results indicate that the Chinese stock market and futures market for the yuan (the Chinese Yuan Non-Deliverable Forward Transactions; CNY NDF market) had a significant impact on commodity currencies before the global financial crisis in 2008/09, then the effect widened to include more commodity currencies in the post-crisis period. Further evidence suggests that the CNY NDF market had a greater impact on commodity currencies than the Chinese stock market. Despite the significant position of the Chinese economy, research also indicates that the impact of Chinese financial markets on commodity currencies (raw material prices) is weaker than the impact of the US stock market and US dollar market.
ISSN:0459-9586
2449-8513