io at 91.80 down 4.1%, page-9

Thanks GreenTint for your post.

They currency does not move day to day or week to week with iron ore spot. That would make no sense. Did the currency rise in Jan when iron ore was above $US130? No it did not.

Respectfully can I say you added more weight to my point?

There is no secret formula which says if iron price =x , US interest rates = y and Australian interest rates are z then the AU$ exchange rate should be blah. In the short run and in the long run. You will dispute the long run comment here but the long-run never seems to come.

Most of the currency trading that happens and that actually sets the exchange rates is not for settlement of international commerce like exports and imports, but rather is for speculative purposes. And what drives speculation? Sentiment. A multitude of market participants have a view of where exchange rates will go and their actions in the currency market determines what the exchange rates actually are.

Iron ore prices, relative growth rates of economies, quantitative easing, etc are some of the factors which SHOULD influence the views of market participants. I am not disputing that with you for one moment. The degree to which each of those factors influences those views is what I contend is very difficult to establish based on just what one of those factors is. From what I actually see, the exchange rate is more responsive to what the RBA or the Fed says, or what market sensitive statistical information comes out, than the iron ore price.