Much of the recent optimism in the Australian dollar (AUD) seems to be stemming from one main factor: A rise in global headline inflation number suggesting a commodity price reflation. Whether or not the global uptick in inflation is just a base effect phenomenon or truly sustainable is a big debate by itself but assuming that the recent coordinated rise in global inflation expectations is sustainable and a commodity reflation unfolds I will argue that such commodity reflation might not necessarily translate into a higher AUD.
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