<div>ONE of the best trades in the FX market in the past three months has been to go long on the Commonwealth currencies of Canada, Australia and New Zealand. These were the biggest beneficiaries of the recovery trade as global demand picked up.&nbsp;<br />&nbsp;</div>
<div>Spurred by China&rsquo;s seemingly insatiable demand for raw materials, these &ldquo;commdollar&rdquo; economies fared much better than the US, Japan and the Eurozone. Australia managed to post positive job growth in three out of the last five months and avoid a recession.<br />&nbsp;</div>
<div>Since the start of March, the Aussie and Kiwi have appreciated more than 30 per cent, while the Loonie (Canadian dollar) rose nearly 17 per cent against the US dollar. But as we approach summer in the northern hemisphere, the commodity rally may sputter to a halt &ndash; and the culprit could be oil.&nbsp;<br />&nbsp;</div>
<div>Like the rest of the commodity asset class, oil has had a meteoric rise over the past three months, recently hitting a high of $72 a barrel. Some analysts have said, perhaps rightly, that the rally is without fundamental merit.&nbsp;<br />&nbsp;</div>
<div>The oil market is one of the most speculative in the world: global demand for oil is about 83m barrels per day, but daily turnover in the benchmark NYMEX crude oil contract is nearly 1bn barrels. That activity has pushed the price of gasoline in the US to $2.70 per gallon, up 50 cents from three months ago.<br />&nbsp;</div>
<div>Gasoline is the only commodity price that affects most consumers in the industrialised world on a daily basis, so the relentless rise in transport costs could threaten the nascent global recovery as more disposable income is diverted from the pocketbook to the pump.&nbsp;<br />&nbsp;</div>
<div>It&rsquo;s always difficult to time the turn in the currency market, and the stall in commodities may be nothing more than consolidation, but until they break out to new yearly highs the risk of further declines remains great.<br />&nbsp;</div>
<div>Boris Schlossberg and Kathy Lien are directors of currency research at GFT. Read commentary at or e-mail them at Boris</div>