While the silly AFR is busy cheering our demise:
A stunning rally for the Australian dollar has almost returned it to pre-pandemic levels reflecting the revival of risk appetite in global shares and the economy’s determination to exit lockdown.
Westpac’s Robert Rennie has a much better grasp of things:
A$ ‘fair value’ midpoint drops to a fresh 19yr low at 0.61. This means that the A$ is now seen as ‘expensive’ to fair value for first time since April 2018 as the coal market crunch is simply being ignored. #ausbiz pic.twitter.com/b9UYyGTd2Q
— Robert Rennie (@Robert__Rennie) April 27, 2020
And the drop in coal prices is indeed significant, driven by impact of COVID on port activity/ demand in Asia plus the collapse in oil prices. Met coal prices down $33 or 22% so far this month; thermal coal prices down $15 or 22% so far this month. pic.twitter.com/0JLNLqBTye
— Robert Rennie (@Robert__Rennie) April 27, 2020
As said, many times this month, the terms of trade are getting belted and iron is next.
Just another data point in the ongoing market hysteria.
