|After an underwhelming start to the month, whereby CAPEX data (the measurement for private expenditure growth in Australia) proved poor to say the least, the Australian dollar has slowly gone about its business and proved that there’s still a lot of life in the commodity currency yet.
Paired with the US dollar, AUD rose a little over 3.5% in the month of June, lows being 0.7384 up to 0.7655, with the main catalyst being a resurgence in iron ore prices, which have soared to $62.33 a tonne, leaving it sitting at their highest level since May 22. This can be boiled down to China’s building boom proving more resilient than expected and should this trend continue many expect AUD/USD to punch through the 0.77 mark.
The other key focus for the month has been the RBA’s repeated standpoint on stability. After the decision to keep rates on hold, they reiterated their viewpoint that the economy will be growing more than 3% over the coming years and although housing prices have been rising significantly in some areas, there are signs these are starting to ease. There have been rumblings that the RBA would signal for a potential rate cut, however when you look at the concerns over the rising housing market and the current ability of investors to take on more debt, this seems an unlikely move.