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Aussie stable as markets weigh on iron ore prices

Monday, Apr 27 2015
With no major data releases from Australia this morning, traders are being focused on commodity prices, primarily iron ore prices which have been effected by slower Chinese growth and production which continue to weigh on the Aussie as lower demands for exports and metals stress the Aussie economy. A number of Australian mining companies are fighting for survival as commodity prices plunge, in part because of slower economic growth in China. As iron ore fell below $50 a tonne last week.
 
Iron ore is Australia’s biggest export, worth A$74bn in 2013-14, and the plunge in prices is beginning to hurt the federal budget. In December, Canberra revised its budget deficit forecast to A$40bn, or 2.5% of gross domestic product in 2014-15, up from a forecast of A$29.8bn made in May, citing the impact of a fall in iron ore prices to US$60 per tonne. 
 
Chinese stimulus measures including two interest rate cuts since November have arrested the steady appreciation of the renminbi and raised fears of capital flight, which would further exacerbate the distortions already wreaked by Chinese property investors in markets around the world as they seek havens for their wealth.
 
Aussie has been little changed this morning currently being traded few points above 0.7820 level. Pair is likely to find support around 0.7750 area and resistance above 0.7850 level. There will be no major data releases later today.
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