AUD is expensive now, who buys expensive? Target 0.6050
Be careful chasing the Aussie Dollar higher, the rally is largely hot air. AUD is the archetypal high-beta FX - tracking global equities in lockstep. But the moment equities turn - AUD will be in freefall. If rates were driving the AUD then the pair would be closer to 0.60.
Coal prices down $33 or 22% so far this month while thermal coal prices down $15 or 22% so far this month. Coal is Australia's second most important export after iron ore and is therefore a substantial driver of Australian Dollar value; higher coal prices and higher export volumes would in turn result in higher earnings for Australia which in turn would support its currency.
"The coal market crunch is simply being ignored,"
The recent drop in coal prices is indeed significant, driven by impact of COVID on port activity/ demand in Asia plus the collapse in oil prices.
Moreover, Westpac in Sydney says research shows the 'fair value' midpoint for the Australian Dollar against the U.S. Dollar dropped to a fresh 19 year low at 0.61.
Coal prices down $33 or 22% so far this month while thermal coal prices down $15 or 22% so far this month. Coal is Australia's second most important export after iron ore and is therefore a substantial driver of Australian Dollar value; higher coal prices and higher export volumes would in turn result in higher earnings for Australia which in turn would support its currency.
"The coal market crunch is simply being ignored,"
The recent drop in coal prices is indeed significant, driven by impact of COVID on port activity/ demand in Asia plus the collapse in oil prices.
Moreover, Westpac in Sydney says research shows the 'fair value' midpoint for the Australian Dollar against the U.S. Dollar dropped to a fresh 19 year low at 0.61.