News & Analysis at your fingertips.

We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site. See our updated Privacy Policy here.



Notifications below are based on filters which can be adjusted via Economic and Webinar Calendar pages.

Live Webinar

Live Webinar Events


Economic Calendar

Economic Calendar Events

Free Trading Guides
Please try again
More View more
Australian Dollar Gassed Up But Iron Ore Drop Aborts Lift Off. Where To for AUD/USD?

Australian Dollar Gassed Up But Iron Ore Drop Aborts Lift Off. Where To for AUD/USD?

Daniel McCarthy, Strategist

AUD/USD, Australian Trade Surplus, Commodities, OPEC+, Crude Oil - Talking Points

  • APAC equities follow on from US lead to consolidate as dividends are paid
  • OPEC+ deliver on expectations, commodities mixed in Asia-Pacific trade
  • Will strong Australian data lead AUD/USDhigher, or is it too backward-looking?

The S&P 500 looked desperate for direction in the US session, closing little-changed, which led to a lacklustre Asian session for stocks, bonds and currencies. Australian equities lost some ground as many of the headline names went ex-dividend today.

As expected, OPEC+ agreed to increase supply by 400k barrels per day, representing less than 1% of global supply. Copper and aluminium were lower today as weaker demand from China was compounded by it releasing some reserves to maintain a cap on prices.

AUD/USD edged only modestly higher today after record trade surplus data was offset by iron ore prices hitting a new low for the year. The July trade surplus reading came in at AUD 12.1 billion for the month against expectations of AUD 10 billion, according to a Bloomberg survey.

The data revealed the importance of China as a trading partner to Australia with AUD 26.6 billion of goods going there in July. The dependence on commodity exports was highlighted

in the breakdown of the four largest exports: iron ore (AUD 17.1 billion), coal (AUD 4.7 billion), natural gas (AUD 4.3 billion) and gold (AUD 1.9 billion).

The RBA meeting next Tuesday has come into view, although we are not likely to see much action. Despite a better than expected local GDP print yesterday and a record trade surplus today, the Australian economy is still struggling under the weight of the lockdown of 2 thirds of the Australian population.

Ahead, there are more US employment numbers, as well as trade data for the US and Canada.


The chart shows the changing nature of the relationship between the Australian Dollar and Australia’s top-4 exports. While the move lower in AUD/USD in August coincided with energy and iron ore moving lower, the recent rally shows a stronger relationship with energy prices.

Australian Dollar Gassed Up But Iron Ore Drop Aborts Lift Off. Where To for AUD/USD?

Chart created in TradingView

--- Written by Daniel McCarthy, Strategist for

To contact Daniel, use the comments section below or @DanMcCathyFX on Twitter

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.