Compass Global Markets' Blog

Market Update - 1st June 2017 - Iron Ore Prices Get Pummelled, Aussie Dollar Follows Suit

Posted by Patrick Downes on June 1, 2017 at 8:37 AM

Chinese manufacturing and non-manufacturing PMI numbers released yesterday morning provided a very short lived boost for commodities and the Aussie dollar with the pair since falling and are mostly lower this morning. The reason for the the half percent drop or so in the Aussie dollar across the board stems from generally lower risk appetite around the globe but also a more than 6% drubbing in iron ore prices which are now dwindling under US$60 a tonne. Trying to determine why iron ore prices are so volatile is a fools game and hence all I can say is expect the unexpected with regards to future moves in iron ore prices; iron ore per tonne has now drifted between US$40 a tonne all the way up to the mid US$90's a tonne only to fall back to around the mid $US50's this morning.

More local Aussie data is due out today with private capital expenditure and retail sales released around 11.30am. With the Aussie under pressure this morning, one would suggest a poor retail sales figure could see the Aussie dollar much lower, potentially in the low 0.73's, while a strong figure should see us testing 0.7500 again in the short term. ADP preliminary U.S jobs numbers are released tonight along with ISM manufacturing PMI - a key leading indicator of economic health in the U.S. All-in-all a busy 24 hours ahead for the Aussie dollar.

DATA RELEASES TODAY:

AUD - Private Cap. Expenditure and Retail Sales at 11.30am

USD - ADP Prelim. Jobs Numbers at 10.15pm

USD - ISM Manufacturing PMI at midnight AEST

AUD EXCHANGE RATES:

AUD/USD – 0.7394

AUD/GBP – 0.5736

AUD/EUR – 0.6561

AUD/NZD – 1.0457

AUD/JPY – 81.978

***Above rates are indicative wholesale rates and intended as a guide only***

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Patrick Downes

Senior Corporate FX Dealer

Phone Patrick - 0431 278 632 

  Email Patrick: patrick@compassmarkets.com

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Topics: Report, Market

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