Australian Dollar has risen in value sharply as investors chase yields and the bucking of the falling trend in commodity prices such as oil and iron ore both of which have come off their lows and have started to rise. The dollar climbed to 76.45 US cents last Friday and not since July 2015, the dollar is buying at over 75 US cents. Although there was a slight decline in oil prices, Brent Crude prices at USD 41.20 per barrel is a long way above the low of USD 27.88 per barrel on 30 January this year. Even though analysts have a bearish outlook on iron ore prices and there has been a recent decline in prices, The Metal Bulletin 60% Fe Iranian Fines Index (MBIOI-IR) stood at USD 52.26 a ton on 16 March compared to USD 35.60 a ton on 16 December last year. Despite the rise in the AUD, we still believe the low inflation, moderate growth numbers and recent softer labour market data would point to a RBA "hold" strategy which may mean that the dollar can potentially rise but that rise will be temporary.
MARKET UPDATE
| Australia Cash rate Australia 90 day bank bill Australia 10 y bond US 10y Govt bond AUD/USD AUD/EUR AUD/JPY AUD/CNY ASX 200 S&P 500 Dow Jones Shanghai Composite Brent Oil (USD per BBL) Gold Spot (USD per oz) Iron Ore 60% MBIOI-IR index (Updated Wednesday) | As at 18-Mar 2.00 2.33 2.55 1.87 0.7645 0.6758 85.14 4.9436 5183 2049 17602 2955 41.2 1255 52.26 | As at 11-Mar 2.00 2.33 2.67 1.98 0.7488 0.6705 85.02 4.8591 5166 2022 17213 2810 40.39 1250 57.02 |
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