The AUD/USD has found some further strength overnight in what has been a good couple of days for the commodity currency.
Yesterday, the FOMC changed to a more dovish tone and suggested rates might be on hold throughout the year. That wasn’t unexpected but markets liked what they were hearing.
We also saw a stronger than expected CPI print yesterday, which was a real boost for the Aussie given the backdrop of a number of concerns economically.
Another reason we’ve been seeing strength is on the back of the Iron Ore price. Recently, there was a mining disaster as a dam collapsed in Brazil run by miner Vale. They are a big Iron Ore producer and that sent Iron Ore higher.
A number of Australia’s largest mining companies export Iron Ore, including BHP, RIO and FMG. So a strong IO price is a real positive for the economy. How long the increased prices last is another question mind you.
0.7050 and then 0.7000 are my next two key support levels below, with 0.7200 remaining as key support.
0.7300 is R2 and the most recent highs sitting at 0.7400.
Despite me suggesting 0.7200 was strong, it appears that it wasn’t strong enough.