What is main factor that has caused the appreciation in April 2016 in the AUD against the USD?
What is main factor that has caused the appreciation in April 2016 in the AUD against the USD?.The remarkable rise of the iron ore price has helped strengthen the Australian dollar to US 77 cents.
• This rise, fuelled by Chinese demand for steel, is expected to be short-lived.
• This should cause the Australian dollar to weaken from where it is currently, as well as iron ore related stocks.
• Rate rises in the US and rate cuts in Australia will help guide the AUD down to US 71 cents.
Following a remarkable rise in the iron ore price, the Australian dollar staged an even more remarkable rally against its U.S. counterpart. But the good news for those shorting the Australian dollar, is that the rally cannot last according to many economists.
There is a strong correlation with the price of iron ore and the Australian dollar. That is quite understandable to some degree, considering Australia is responsible for just over half of the world’s iron ore exports through mining behemoths such as BHP Billiton (NYSE:BHP) and Fortescue Metals (OTCQX:FSUGY).
What this means for the Australian dollar.
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