Rebounding iron ore prices support AUD ahead of key employment report - BNPP

Research Team at BNP Paribas, suggests that the commodity currencies have been gradually gaining ground against the USD this week and this comes against a back drop of stable equity markets but a rebound of several key commodity prices.

Key Quotes

“The rise of oil in recent days has caused us to take profit on our USDCAD/long oil trade recommendation established on March 31. Meanwhile, a renewed bounce in iron ore prices (rising almost 7% this week) is likely to be feeding through to support for the AUD.

Overnight, the conditions component of the NAB business survey was stronger than expected, reaching its highest level since early 2008. Thursday’s employment report is a focal point for the AUD as this is a potential catalyst for an increase in pricing for renewed RBA rate cuts. We remain short AUDNZD targeting 1.06 and long EURAUD via a derivatives recommendation.”