The entire commodity complex is falling because of a surging...

The entire commodity complex is falling because of a surging $US. The fall in AUD means prices for commodities have barely fallen in AUD terms.

The AUD is approaching 85 cents far quicker than most anticipated. Down 10 cents in less than a month.

At some point the supply and demand fundamentals for the various commodities will diverge somewhat from a pure $US correlation.

Also a stronger US dollar without the Fed even increasing rates will help the US economy pull up quicker and consequently help stabilise world markets.

This shift back to the $US is good for Australian miners, exporters and the economy.

On currencies versus metals prices, using historical exchange rates and spot copper prices:

16/7/08 AUD copper price $3.79

11/8/08 AUD copper price $3.89


Aussie miners are getting more for their copper now than 3 weeks ago, even though the spot copper price has dropped 10%.


BHP is very copper heavy as we well know and IMO it's a matter of time before punters wake up and smell the cheese.