| While it’s unlikely that commodity prices will stage a material rebound, there is a good chance that a trough has been found. There are two reasons for this. Firstly, much of the shrinkage that regulators sought in the commodities market appears to have occurred. Secondly, it looks increasingly likely that the US dollar is at a peak.
Now this clearly carries significant ramifications for the Australian market. It’ll remove a key source of angst for investors and it should counter much of the pressure the Reserve Bank of Australia is under to cut rates again. That may sound counterintuitive as far as the US dollar goes, with most economists arguing that any renewed US dollar weakness strengthens the case for the RBA to cut. This isn’t necessarily the case though, as a weaker US dollar is normally associated with higher commodity prices...............................................Full Article: Source
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