World Fist Update
The Aussie Dollar continued its losses from February, falling another 1.5c against the USD during March, to hit fresh 2018 lows against the greenback.
Mid-month, the AUD briefly climbed back above 79c for about an hour, as U.S. retail sales dropped 0.1%, marking three consecutive months of decline for the first time since April 2012. This added to some of the strength gained from the U.S. missing average earnings expectations and thus lowering the probability of a fourth rate hike this year. On another note, President Trump’s Twitter account went into overdrive during March, at one point stating that he is “…working on a security agreement so we don’t have to impose steel or aluminium tariffs on our ally, the great nation of Australia.”
Since then, the AUD did a good job to dig in its heels, as fears of an international trade war applied strong downward pressure. Although Australia is said to be exempt – our biggest trade partner – China, is feeling the wrath of one of their largest trade partners. China has since retaliated applying tariffs to 128 imported U.S. products, amounting to approximately $3billion.
Falling commodity prices have put further pressure on the AUD, with iron ore shipments (based on value) falling 23.7% year on year. The last time Australia was making this little money from iron ore was in February 2016, with the price of iron ore falling 12% this month alone.