Iron-ore prices to support AUD by end-2017 - UBS

Analysts at UBS published a latest outlook on the iron-ore prices and its impact on the AUD prices going forward.

Key Quotes:

“While market woes over a slowdown in China growth appear to have receded somewhat over the past month, iron ore remains fairly depressed at ~$56/t vs. $86/t in Q1-17.

However, few believed that iron ore prices >$80/t would be sustained for a prolonged period, and we would argue that such levels were far from being priced into the currency.

In fact, we estimate that our year-end AUD/USD forecast from a flow perspective is consistent with an average 2017 iron ore price of $65/t, which would be realised at steady spot prices around current levels until year-end.

Our commodity analysts expect iron ore prices to average $71/t in 2017 - which should facilitate a record-high trade surplus, over time supporting AUD - and end the year at $60/t.”