The Australian dollar remains range-bound despite sharp moves in iron ore and crude oil, trading as a global risk proxy.
The Australian dollar traded just below 0.7000 on Monday, rising 0.1% with a tight 30-pip range. The currency ignored a 9% drop in crude oil and stagnant iron ore prices below $100 a tonne, defying its traditional commodity-linked behavior.
Iron ore, Australia’s largest export, has remained under $100 since late June. Chinese steel output has fallen 5-6% year-over-year, with inventories accumulating. Despite these headwinds, the AUD showed minimal reaction, reflecting its shift toward a risk-on proxy rather than a commodity play.
The focus now turns to Wednesday’s Reserve Bank of Australia meeting, where markets await signals on further rate hikes after three increases this year.