Australia, NZ dlrs Dragged Lower by Iron Ore Weakness

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SYDNEY, June 22 Reuters The Australian and New Zealand dollars fell on Tuesday amid further weakness in iron ore prices, as China tightens its oversight of the market and targets speculative trading and steel production.

The Australian dollar was trading 0.29 at 0.7520, near its lowest since late last year, as iron ore and copper prices extended their falls.

The New Zealand dollar was 0.16 lower 0.6978, after hitting a sevenmonth low of 0.6923 on Friday.

The Aussie and its kiwi dollars have fallen 4.6 from their May highs of 0.7891 and 0.7316, respectively, despite high commodity prices, as investors and central banks turn their focus to a recent quickening in inflation and whether that will lead to shifts in monetary policy.

But on Tuesday, investors were turning their focus back to fundamental factors, traders said.

Another fall in benchmark iron ore futures in China on Tuesday, which narrowed price rises to 30 so far in 2021, hurt the commodityprice sensitive currencies, as Beijings plans to step up inspections into commodity pricing.

China is upping the ante on a move towards increased ferrous selfsufficiency which will in time see iron ore prices lower, Westpac strategists said in a note.

However, even with that iron ore prices remain just shy of alltime record highs… our measure of fair value for the A has actually risen by 4 over the last 4 weeks. The degree of stretch has hit historical extremes.

Recent strength in the greenback, which has firmed…

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