Why the Aussie Is Booming Amid a Trade Spat With China
Despite strained diplomatic ties, Australia’s relationship with its biggest trading partner is only set to strengthen.
It all comes down to iron ore.
Photographer: Brendon Thorne/BloombergJudging by the sounds emerging from embassies and trade ministries, you’d think one of China’s most important economic relationships was on the rocks. But currency markets are predicting it’s on the verge of another boom.
The Australian dollar hit its highest level in more than two years Thursday, capping a 29% rally from its nadir in late March. The moves come after data showed the country emerging from recession in the September quarter. That’s a remarkable contrast to the gloomy political picture, where Australia and its biggest trading partner, China, have been locked in a deepening cycle of conflict for months.