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During the recent spate of upgrades for Fortescue, one often quoted strength (by Charlie Aitkin in particular) was that the iron ore price had bottomed in Australian dollar terms. Such was always ridiculous and now it’s fact:
Australian dollar iron ore is today trading at $59.79, a new low that has violated the 2015 support zone as Capt’ Glenn’s bullish madness infects currency and bond markets even while the actual inputs into the economy crater.
This has negative implications for iron ore miner earnings, Australian nominal growth, and Budget revenues.
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About the author
David Llewellyn-Smith is Chief Strategist at the MB Fund and MB Super. David is the founding publisher and editor of MacroBusiness and was the founding publisher and global economy editor of The Diplomat, the Asia Pacific's leading geo-politics and economics portal.
He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.