Australian wool market rises as Aussie dollar falls

The Australian wool market strengthened with prices rising 1.2 percent on average this week, reversing recent downward trends as the Australian dollar weakened to below 69 US cents, analysts said on Friday.
The AWEX Eastern Market Indicator (EMI) rose nine cents to finish the week at 775 cents a kg clean, based on increases of nine cents in the northern market (Sydney), and 10 cents the southern market (Melbourne).
Their regional indicators ended the week at 781 and 770 cents a kg clean, respectively.
In Fremantle, the Western Region Indicator rose 24 cents to finish the week at 747 cents a kg clean.
The market rose despite concerns over China's impending credit halt, which contributed to sharp falls in the market last week.
"Wednesday saw a surge in wool prices from 18.5 to 23 microns in all three selling centres which was largely due to the falling Australian dollar and the Chinese influence," Phil Fyfe from the Australian Wool Industries Secretariat said.
The Australian dollar slipped below the 70 US cent level during the week to rest at fresh seven-month lows at just under 69 US cents by the end of the week.
"By Thursday the market had flattened as was the feeling in the auction room with some of the gains of the previous day being given back," Fyfe said.
Fine wool prices made steady gains, particularly in Fremantle where 18.5 to 21 micron categories all gained over 30 cents in the week, woolbroker Landmark said.
"Medium wool categories performed particularly well during Wednesday's trading, and held the gain at Thursday's sales to close the week on a promising note," Landmark said.
"Broad wool categories have been tenuous this week, recording only small rises or falls dependant on the category and/or selling centre," it said.
Notably, the northern 22 Micron Price Guide (MPG) rose 27 cents to 779 cents a kg clean, while the southern 18.5 MPG rose 18 cents to 1023 cents a kg clean.
"Pass in rates are down this week as woolgrowers sell wool in response to price rises," Landmark said.
This saw 12.5 percent of the week's 60,181 bales passed in nationally.
"Analysts are concerned by the lack of interest from Europe despite a weakening of the Australian dollar and smaller offering compared to a few weeks ago," the woolbroker said.
"Nevertheless, Chinese buying is thought to be responsible for most of this week's gains and it is hoped that this will continue into next week," it said.