Iron ore and the aussie: what's the link doing now?
Iron ore is Australia's biggest export, and its price used to move the aussie reliably. The relationship has loosened as other forces grew louder.
What's your observation?
- how closely AUD tracks iron ore these days
- the China demand signals you watch
- what matters more for AUD now
Background: commodity currencies and China's economy.
Background: Commodity currencies explained: the Australian, New Zealand and Canadian dollars and the Norwegian krone
Why the currencies of big commodity exporters move with iron ore, dairy and oil prices, what each country actually exports, and when the link weakens.
What are commodity currencies?
Currencies of countries where commodity exports are a large share of trade, such as the Australian dollar (iron ore), the New Zealand dollar (dairy), the Canadian dollar (oil) and the Norwegian krone (oil and gas).
Why does the Australian dollar follow China?
Iron ore is Australia's largest export and much of it is sold to China, so Chinese demand and data affect Australia's export income and its currency.
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