The Australian economy relies heavily on commodities with 5% of the country’s GDP represented by mining (including energy). Recent weakness in copper prices has weighed on the Aussie though with copper holding at support and a reversal setting up on gold, maybe we are going to see some Aussie strength in the near-term. Note that iron-ore prices have fallen in recent weeks and exports of coking coal are expected to decrease while prices increase temporarily. The RBA have indicated that they do not expect higher commodity prices to add materially to domestic demand, given their temporary nature, though I feel it is still something worth observing and adding to one’s Aussie toolbox.
On Tuesday we get meeting minutes. The May statement on Monetary Policy and Commonwealth Budget show that growth will lift in 2018 and 2019 from the current pace with an improvement in consumer spending, dwelling investment and business investment contributing towards growth. Perhaps the release on Tuesday will further support these forecasts and shed further light on the RBA’s view on the economy and future path of monetary policy.