ATFXIron ore prices continue to rise, and the Australian dollar and New Zealand dollar continue to appreciate

Market trend:2month7From now on,EURUSDAccumulated decline3.68%The cumulative increase of the US dollar index2.59%Most non US currencies are continuously depreciating. The Australian dollar and the New Zealand dollar are quite unique, compared to the same periodAUDUSDAccumulated increase3.93%，NZDUSDAccumulated increase3.1%Both have appreciated significantly against the US dollar.

Reserve Bank of Australia: The Reserve Bank of Australia has not raised interest rates, and the benchmark interest rate remains at0.1%At an ultra-low level. Australian Federal Reserve Chairman Lowe stated in the latest interest rate decision that although inflation has risen, it is still too early to draw long-term conclusions, and the Ukraine crisis is a major source of new uncertainty. Latest from AustraliaCPIby3.5%Although higher than the regulatory target2%But far below the level of the United States and European countries. It can be considered that the pressure from rising prices on the Reserve Bank of Australia is much smaller than that on the Federal Reserve, which is expected to do so this month17The daily interest rate decision calls for a rate hike. Obviously, from the perspective of monetary policy alone,AUDUSDThe probability of a decline is higher, which is inconsistent with the actual development of the market.

Commodity currency and iron ore: ore exports account for a percentage of Australia's total exports36%The rise and fall of iron ore prices have a significant guiding effect on the rise and fall of the Australian dollar. Due to the dual impact of the tense situation between Russia and Ukraine and the excessive issuance of currency by the Federal Reserve, since last year11Since the beginning of the month, the price of iron ore has risen cumulatively56.4%, highest touch849element/Ton. This is the secret behind the recent appreciation of the Australian dollar against the US dollar. New Zealand relies heavily on Australia's economy, so the New Zealand dollar often fluctuates with the Australian dollar. Under the influence of the continuous appreciation of the Australian dollar,NZDUSDNaturally, there is also an upward trend. It is expected that Russia and Ukraine's exports of iron ore, a strategic resource, will continue to decreasefuturesThe price will continue to rise, and the appreciation trend of the Australian dollar and New Zealand dollar is far from over.

It should be noted that the second round of negotiations between Russia and Ukraine reached a consensus on establishing a humanitarian corridor. Although this consensus cannot change the situation of the two countries' conflict, it sends an optimistic signal to the market: there is a high probability of reaching a substantive agreement in the third round of negotiations. If this situation is realized, the market's risk aversion will quickly cool down, the core factor driving the rise in iron ore prices will disappear, and a price drop is a highly probable event. At that time, the rise of the Australian dollar and the New Zealand dollar will also come to an abrupt end.

Market trend analysis:


Summary
ATFXThe analyst team believes that Russia's offensive against Ukraine has come to a standstill, with a high level of risk aversion and cautionAUDUSDandNZDUSDSuddenly falling back.

*Risk Tips and Disclaimers*
There are risks in the market and investment should be cautious. The above contents only represent the views of analysts and do not constitute any operational recommendations.