AUD: Watching iron ore prices – Rabobank

By FXStreet Jane Foley, Research Analyst at Rabobank, suggests that the AUD is the best performing G10 currency on a 1 day view lifted by the better performance of the iron ore price which gained more than 7% over the course of last week.

Key Quotes

“To some extent the outlook for the price of iron ore has been impacted by that in the oil market where there is a clear disagreement about whether the price is in the process of bottoming or whether there is yet further to fall. CFTC data last week show the highest level of open interest since the tracking of this data series started in 2006.

Softer demand for oil in China is suggestive of weak levels of activity in the production sector and this is a negative factor for the outlook for steel and iron ore.

For some time overcapacity of infra-structure in China’s productive and housing sectors has boded poorly for the outlook for steel and iron ore. News that the EC is set to impose provisional duties later this month of up to 16% on Chinese steel exports following its investigation into dumping is another factor that should weigh on the outlook for iron ore.

Although …read more

Source:: FX Street