Australia’s currency has increased greatly in recent days.
Key points:
- The Australian dollar travelled through 68 US cents today, up 24 percent from its mid-March low
- The Reserve Bank kept interest rates on hold at a record low 0.25 percent however they are greater than United States, British, EU and Japanese rates
- Australia has actually published another current account surplus, based on a big trade surplus as iron ore export rates flourish above $US100/ tonne
From its least expensive level in almost twenty years of 55.1 US cents in mid-March, today it was worth 68.13
That means in less than 10 weeks it has actually jumped 24 percent in worth versus the United States dollar– even while the world’s economies sustain the sharpest global decline since the Great Anxiety, Australia’s included.
Why?
You may be assuming it’s due to the fact that of the dire political-economic situation in the United States at the minute pressing the greenback lower.
However currency analysts state it has much more to do with the fact that China’s economy has actually been waking from its COVID-19 coma, so its pressing cravings for Australia’s mineral resources (particularly iron ore) has actually returned.
Iron ore rate boom
Iron ore prices have been on a tear recently.
They have actually risen to $US102 a tonne, due to increased demand from China and serious supply disturbances in Brazil (one of the world’s significant iron ore providers).
Even with the current rise in the Australian dollar, iron ore costs in regional currency terms are very close to th