By Andrew Woods | Source: AWEX, RBA, ICS
A common perception is that Australian commodity prices have a strongly negative correlation with the Australian dollar-US dollar exchange rate so that when the exchange rate moves in one direction, commodity prices move in the other direction. Like all myths, there is an element of truth to this, although the element is quite slim. This article takes a look at the relationship between the 19.5 MPG wool indicator and the Australian and US dollar exchange rate.
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