Australian Govt: Iron-ore prices to remain high for the next two years, AUD bullish
|In its latest assessment of commodity exports and prices, the Australian government offered an upbeat outlook on iron-ore prices.
Key takeaways
“Also expects Australia to become the world's largest gold producer. Exports of commodities expected to be upwards of 250bn AUD in the year ahead.”
'Significant growth in Brazilian short-term supply remains unlikely due to the wider problems of COVID-19 across the Brazilian economy. The main risk to prices is thus on the demand side.”
“Iron ore would hold around $US100 a tonne "over the coming months" and would gradually decline to be closer to $US85 a tonne by June 2021.”
Market reaction
AUD/USD catches fresh bids and briefly regains 0.7050 after an influential economist pushing back his RBA rate cut forecast to November from October. The US stock futures rise, lending support to the higher-yielding aussie.
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