Commodity price index signals further terms-of-trade lift

The RBA has released its commodity price index for June, which increased by 2.1% in SDR (currency weighted) terms – the key determinant of the terms-of-trade – and by 2.3% in Australian dollar terms:

Preliminary estimates for June indicate that the index increased by 2.1 per cent (on a monthly average basis) in SDR terms, after increasing by 0.3 per cent in May (revised). The non-rural and rural subindices increased in the month, while the base metals subindex decreased. In Australian dollar terms, the index increased by 2.3 per cent in June.

Over the past year, the index has increased by 13.0 per cent in SDR terms, led by higher iron ore, gold and beef & veal prices. The index has increased by 19.4 per cent in Australian dollar terms.

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