The Australian dollar has continued to rise today on the back of Iron ore prices but many are starting to now question how long the rally can last.
Since Monday Iron ore has risen by over 20 percent and now some are predicting the price of Australia’s biggest commodity is being driven by sediment rather than by fundamentals, and especially after yesterday’s distavorous trade figures out of China which confirms problems appearing in the world’s 2nd largest economy.
"The iron ore and steel markets have gone berserk -- they've departed from fundamentals and are heavily driven by sentiment," Zhao Chaoyue, an analyst at China Merchants Futures Co. in Shenzhen, said before the Metal Bulletin price was published.
"Investors are expecting further monetary easing by the Chinese government to boost steel demand." He added.
Drivers for the Aussie dollar tomorrow include the latest consumer Inflation expectation index as well as key data out of China which includes the producer price and consumer price indexes.
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