Buoyant commodity prices not enough to keep AUD afloat

By 13 February 2019Exchange Monitor, The Alchemist

The Alchemist, Issue 35: Resilience in commodity prices has not been enough to prevent the Aussie dollar from being one of the worst-performing developed economy currencies of 2018.

The Aussie dollar closed out in January 2019 at US$0.715, $0.137 below the price predicted by RFC Ambrian’s commodity price-based exchange rate model.

The ongoing deviation between commodity prices and the AUD/USD exchange rate which began in January 2018, while not as pronounced as that which was seen during the GFC, has already become the longest significant deviation since the early 2000s.

High commodity prices, particularly in bulks, are combining with current low exchange rates to deliver Aussie miners strong cash flows.

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