The Aussie dollar continued to rise higher during today's trading session, heading to its latest two-year high recorded on Friday at 0.757000 against the US dollar.
This increase was helped by rising iron ore prices as demand from China increased and it soared higher due to reduced supply and disruption caused by the storm that hit Australia, the world's largest producer.
Iron ore futures on the Chinese Dalian Commodity Exchange jumped nearly 10% on Friday to an all-time high, exceeding 1,000 yuan ($ 152.95) per tonne for the first time in history.
Australian iron ore is still spared any restrictions by China, unlike other imported goods stuck in geopolitical tensions between the two trading partners.
However, the fall in Australian iron ore exports of around 6.1% in the week ending December 4 has to some extent raised concerns that China may block imports from Australia.
In addition, the strengthening of the Aussie dollar was also supported by risk-on-market sentiment following positive news on the Covid vaccine and confidence in the US coronavirus assistance package to be implemented soon.
