In this Weekly, we are enclosing a recent research piece from our Senior Currency Strategist Emma Lawson on the commodities that are (and which will be) important drivers of the Australian dollar, including the outlook.  We also preview local data and RBA speeches for the week ahead.

The main findings are:

• The decline in commodity prices is a net negative for the AUD. But we find that in the short term, it is the broad commodity indices that carry the most weight. We should be watching commodity sentiment, not particular commodities for a daily guide.
• Over time, the Australian specifics come to the fore. In this, iron ore has to share the spotlight with LNG. The outlooks for both are subdued.
• The price declines in commodities mean more pressure for AUD, but not to historical lows. The worst, from this source, is likely behind us.
• While it is human nature to fixate on a particular factor, the broad commodity price index is a better predictor of the AUD (and the New Zealand dollar (NZD), the Canadian dollar (CAD) and the Norwegian Kroner (NOK) in the short term. NAB forecasts modest declines in the Australian commodity price index.

For a full synopsis of the markets this week download:

• Australian Weekly Markets: September 7 2015 (PDF, 559 KB)

For further FX, Interest rate and Commodities information visit nab.com.au/nabfinancialmarkets

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