2 Reasons the Australian dollar has charged higher above 69 cents

The Australian dollar (AUD) has charged higher to 69 cents against the US dollar. It is largely been driven by

  1. A weaker US dollar
  2. Strong iron ore prices

A weaker US dollar

During the start of the COVID-19 pandemic, the US dollar got stronger and stronger. Fear griped the market, creating massive demand for US dollars and US dollar 'safe haven' assets like US treasuries. Since the middle of March, as infection rates in many western countries peaked, markets started to focus on the recovery. As conditions improved, markets became more optimistic, moving money back out of the US dollar, sending it lower.

Strong iron ore prices

The Australian dollar has traditionally had a strong relationship with commodity prices and in particular, iron ore. This is because it is one of Australia's most important and valuable exports. Recently, the iron ore prices has rocketed above US100 a tonne. This has been because there has been strong demand for the commodity in China as they ramp up steelmaking. At the same time, supply has been constrained from Brazil (one of the worlds largest suppliers) due to COVID-19 shutdowns.

AUD to USD exchange rates

TimeOpenLowHigh
Today0.6900
In the last week0.65730.6900
In the last month0.63760.6900

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