20 Mar 2015
Deterioration in Australian commodity exports ignored by FX markets - Westpac
FXStreet (Barcelona) - Rob Rennie of Westpac, explains that the deteriorating condition of Australian commodity exports supports a lower AUD/USD view, further expecting the pair to see 0.7500 levels in coming weeks.
Key Quotes
“I maintain the view that the AUD is likely to see 0.7500 at some point in coming weeks.”
“The deterioration in Australian commodity export prices continues almost unnoticed by FX markets. Iron ore was down 0.87% last night at $55 and down 4.6% so far this week. You have to go back to pre-2005 days to see evidence of such low prices; Newcastle thermal coal was down circa 2.3% at $54.50 last night in the back end of the curve and down 6.5% so far this week. You have to go back to May 2007 to see lower prices; Coking coal was at $98 earlier this week – you have to go back to Jan 2007 to see prices below $100.”
“All this supports a lower AUD.”
“I see a range of arguments to suggest that yield related demand for the A$ will be strong through this year and into next. I think this makes the A$ very sticky as we approach the 0.73/ 0.75 region.”
Key Quotes
“I maintain the view that the AUD is likely to see 0.7500 at some point in coming weeks.”
“The deterioration in Australian commodity export prices continues almost unnoticed by FX markets. Iron ore was down 0.87% last night at $55 and down 4.6% so far this week. You have to go back to pre-2005 days to see evidence of such low prices; Newcastle thermal coal was down circa 2.3% at $54.50 last night in the back end of the curve and down 6.5% so far this week. You have to go back to May 2007 to see lower prices; Coking coal was at $98 earlier this week – you have to go back to Jan 2007 to see prices below $100.”
“All this supports a lower AUD.”
“I see a range of arguments to suggest that yield related demand for the A$ will be strong through this year and into next. I think this makes the A$ very sticky as we approach the 0.73/ 0.75 region.”