so now over $150!!, page-31

If the Iron Ore Rally starts to look sustainable I would expect a big re-rating soon. Aside from Cyclone Narelle causing a temporary shut ins for the Pilbra not sure why the share price is going backwards. Last time Iron Ore was at circa $140 AGO sp was well over $3...........


Australian dollar could go above $US1.08 as price of iron ore rises
• BY:NICHOLAS HASTINGS
• From:Dow Jones Newswires
• January 11, 2013 2:24PM
IRON in the soul? Nope. It's iron ore at the heart of the Aussie. And this could well ensure that the recent rally in the Australian dollar is far from over.
In fact, the Aussie could see a repeat in early 2013 of its performance at the start of 2012, heading back up over $US1.08 within the first few weeks of the year.
For the last few months, the outlook for the Aussie has been uncertain. Global growth prospects have been gloomy. Fears that the Chinese economy could face a hard landing have persisted. And the outlook for commodity prices hasn't been convincing.
A slowdown in Australia's domestic economy hasn't helped. Earlier this week, retail sales fell by 0.1 per cent in November instead of rising by 0.3 per cent as hoped.
As a high-yielder, the Aussie was still finding good support but its recent rally was flagging.
However, all that should change now--largely thanks to China.
New trade figures from Beijing show while Chinese demand for foreign goods is rising, foreign demand for Chinese goods is also on the way up, with exports rising by 14.1 per cent in the year to December and imports rising by 6.0 per cent.
This means two key things for the Aussie.
Iron ore prices are likely to continue their rebound and global risk sentiment will continue to recover. Both of these will make the Aussie even more attractive.
The impact of the news from China was immediately apparent in Australian financial markets, with the chances of another rate cut falling to 34 per cent from 40 per cent.
Much of this optimism over the Australian economy is related to the recovery in steel prices in China, which means that iron ore inventory levels will fall and the recent recovery in ore prices will become more sustainable.
Geoffrey Kendrick at Nomura International in London reckons this could be instrumental in erasing Australia's trade deficit, which widened in November to its worst levels since early 2008.
But there is a wider reason why the Aussie is likely to find even more support at this stage.
More evidence that the global economy will avoid recession and that the strength of China will help to ensure recovery means that global risk sentiment will continue to improve.
A recent rally in the Australian dollar to its highest level since September 2008 against the yen, one of the world's key safe-haven currencies, has illustrated the upturn in sentiment that has already taken place in recent weeks.
For the Australian dollar this can only be good news. Not only is it one of the highest yielding major currencies, but it has become increasingly popular as a reserve currency as the recent global financial crisis has left central banks seeking alternatives to the U.S. dollar and the euro.
These diversification flows will probably continue in months to come, especially if Australia continues to offer economic stability.
The news from China has already pushed the Aussie back up to a four-week high around $US1.0575. A break of its February 2012 high at $US1.0857 could then put it in line for a test of its all-time high in July 2011 at $US1.1080.
This afternoon the dollar was trading at $US1.0577.