A competitive environment saw strong gains across all wool types and descriptions at Australian wool auctions. Price gains of well over 3% in AUD (Australian dollar) were commonplace. The AUD also strengthened against the USD (US dollar) by 0.7% for the second consecutive week and so gains in USD terms were even greater. The AWEX (Australian Wool Exchange) EMI (Eastern Market indicator) gained a very healthy 49ac to close at 1825ac per clean kg. This level represents a 21% increase from just one year ago, or A$3.13 per clean kg higher. The theoretical effect of rising AUD rates on the forex (foreign ex-chang
e) is usually deemed depreciative, but for the second week running, the opposite has occurred and by large margins. AUD Forex rates on most major currencies went 0.5% to 0.7% stronger and coupled with the 2.8% rise in local markets, the EMI when expressed in USD (US Dollars) closed out at 3.5% dearer or 48usc higher. This led to the USD EMI finishing at 1424usc per clean kg. The past few months has some uncharacteristic buying strategies being witnessed in the sale rooms across Australia. The local market just doesn’t seem to move upwar
d any longer in margins indicative of the overseas pricing signals. Indeed, when the market does decide to move, it shoots well above any of the expected or sold at levels, but then inevitably succumbs to that price sensitivity and drifts backward. All this activity though is on an ever increasing trajectory, with this weeks levels generally approaching the record highs once again, and highest ever levels on some of the individual micron brackets.
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