I had posted in 2017 about Australia and Norway markets being possible commodity proxies. As I pointed out, backtesting shows a meaningful correlation between the Australia stock market and DBB which is the Invesco Base Metals fund. I am also a regular visitor to Australia and my visits to Perth show that the mining driven economy is booming with new business parks (logistics etc) being created near the airport. I took the opportunity during my last visit to drive through these new business parks to see whether they were just empty shells or whether there were lorries going to and fro.
It is therefore no surprise that the AUD hit a 2-year high recently and shows no signs of stopping. This is good news as it also suggests good demand from China for industrial metals and other exports.
Coincidentally, I bought more ASX ETF IOZ on 7 and 8 April, just as the currency was starting to ramp up. So this brought my capital gain from the increase in the ASX200 and the currency appreciation.
I continue to be bullish on Australia (hence my belief in Fraser's Logistics Trust which has significant Oz exposure).
Previous Post on Australia: https://buyaftercrash.blogspot.com/2017/07/norway-and-australia-and-possible.html
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