The Aussie is still tracking global equity sentiment and confidence in emerging markets but the Energy price rout is threatening the relative stability AUD/USD has enjoyed in recent days, per Westpac Institutional Bank.
Key quotes
“The Aussie dollar isn’t traditionally seen as being at much risk from low oil prices given that Australia is a net importer of crude oil. But liquefied natural gas is now our number 3 export and its price is tied to oil. Moreover, coal prices are being dragged down by the oil rout.”
“Iron ore is proving resilient, with prices holding around $85 per tonne and Australia’s export volumes rebounding in March. But the other 2 exports in Australia’s top 5 are education and tourism, which face an incredibly difficult year, with the government indicating that international travel restrictions will remain for many months.”
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