The aud is sometimes referred to as the commodity currency, especially with regards to mining.
Our main mining commodity being iron ore . . . the ups and downs of the iron ore price and the aud / usd exchange rate do generally track remarkably in sync.
If the aud slumps against the usd then our mined ores are cheaper for our overseas customers (depending on cross rates).
During the Howard / Costello government the aud was worth 48 usa cents . . . making our mined ore attractively cheap . . . but when we turn those usd that we are paid in, back into aud it doubled the aud that we received. A natural hedge as you say.
We have been pretty steady hovering around 67 to 68 for a while now.
At the other extreme, some 12 years ago, one aud was worth $1.14 usd . . . a rare scenario.
Looking forward to the preliminary report out in a few weeks time.
MGX Price at posting:
47.0¢ Sentiment: Buy Disclosure: Held
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