Market Update – 2nd July – Iron Ore Near 5 Year Highs & RBA Meet On Cash Rate Again

Please note that the commentary below is factual information provided to a group of readers as a web blog, and where an opinion is expressed by the author, it is GENERAL ADVICE only.

Stocks Open Higher:

U.S and European stocks started the weak higher overnight, gaining right across the board with the best  performances seen on the NASDAQ and the DAX which were up 1.06% and 0.99% respectively. The AUD however, which had started the week in good form, succumbed to selling pressure overnight and is down roughly half a percent since Monday morning. AUD/USD briefly climbed about 0.7000 yesterday but is now back in the mid 0.69’s, while AUD/GBP looks like it will struggle to hold onto 0.5500 today.

AUD Retreats As RBA Meets:

The RBA meet again today to set monetary policy – it doesn’t feel like a month since they last cut rates – and look set to cut rates again by a further 25 basis points. This would bring the official cash rate to a new record low of just 1%. The idea is that lower interest rates will help to stimulate growth and jobs, but the truth is lower interest rates for the sake of lower interest rates has not been working in Europe nor the U.S, where growth is still insipid despite record low interest rates. While at the save time savers and those with surplus cash are penalised with low returns.

Iron Ore At 5 Year Highs:

No other economic data is out today, but interestingly Iron Ore prices have hit fresh five year highs overnight and appear to be closing in on A$180 a tonne, a price not seen since the mining boom during the early part of the decade. Miners like BHP, RIO, FMG and MGX should post bumper profits in their full year numbers released this quarter. Their good fortunes will also be good for Australia’s budget numbers of which Josh Frydenberg will likely take credit for.


AUD/USD – 0.6934

AUD/GBP – 0.5473

AUD/EUR – 0.6139

AUD/NZD – 1.0407

AUD/JPY – 75.219


All Ords (XAO) – 6,731

Gold – A$1,986/oz

Silver –  A$21.74/oz

WTI – US$59.19/barrel


AUD – RBA Rate Statement & Cash Rate Decision at 2.30pm

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Patrick Downes

Senior Corporate FX Dealer

Phone Patrick – 0431 278 632 



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