31/03/2015 – Iron ore price weighs on Australian dollar

Another slide in iron ore prices has pushed the Australian dollar back below US78 cents.

At 4pm (AEDT), the local currency was trading at US77.16 cents, down from US78.01 cents on Friday.

Commodity prices took a tumble on Friday, with oil and copper falling, and iron ore plunging to a six-year low.

“The combination of oversupply and the weakening building sector in China, Australia’s largest trading partner, is leaning on the Australian dollar,” OANDA Asia Pacific senior trader Stephen Innes said.

The currency was also hit by Chevron’s decision to sell half its stake in Caltex Australia, he said.

Mr Innes said it was the last of the multinational oil giants to pull its investment out of Australia’s oil and gas industry.

“Naturally, there are some currency implications on these types of deals to be expected, and currency traders will likely start speculating how much of the impact of this news will hit the forex market,” he said.

Source – TheAustralian.com.au