Australia’s durable growth, currencies that impact wheat

Australia’s economy, Aussie wheat prices may be running out of steam

By Erik Norland, Senior Economist, CME Group

Can Australia’s 28-year record-setting expansion continue?

  • Fed’s 25-basis-point rate cut could help support Australian dollar
  • Flexible AUD exchange rate, monetary easing helped country dodge a recession
  • Australia has high household debt, a possible housing bubble
  • A slowdown in China, major market for Aussie commodities could pressure AUD
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Australian Wheat sways with the Ruble, USD and Renminbi

  • Ruble has strong influence on global wheat prices as Black Sea exports dominate
  • Australian dollar absorbs less than 30% of wheat’s price movement risk
  • China’s economy might slow down as a result of high debt, demographics
  • Chinese slowdown could weaken AUD, wheat and other commodities
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