Wool Prices Hold
May 20, 2016

Anticipation of how central banks in Australia and the United States will set interest rates in the coming months seemed to put downward pressure on the Australian dollar, which fell again this week to close at 72.09 U.S. cents. The currency, which has fallen 8 percent in the past month, appears to be a major factor affecting the Australian wool market with the weaker currency keeping wool prices buoyant.

The market had two sluggish selling days across all centers pushing the Australian Wool Exchange Eastern Market Indicator to 1291 to finish the week 4 cents higher. The true effect of the currency movements on the wool market, however, is revealed when looking at the EMI in U.S. dollar terms.

Despite the modest increase in Australian dollar terms, the EMI finished a noteworthy 14 cents lower on a U.S. dollar basis.