SYDNEY: The Australian dollar sped to a four-year high on the euro on Thursday as monster gains in commodity prices looked set to shower exporters in cash, and Europe desperately sought replacements for Russian supplies.
The euro crashed through its 2021 trough to reach its lowest since early 2018 at A$1.5215, having fallen for nine straight sessions. It was now down 2.2% on the week so far and heading for the next bear target around A$1.5150.
Flows from the euro helped the Aussie hold firm at $0.7291 , after touching a six-week peak of $0.7306 overnight.
That left it tantalisingly close to the January top of $0.7314 and the 200-day moving average at $0.7326, and a break would be bullish for a run to $0.7370 and $0.7480.
The kiwi dollar lagged a little at $0.6770, having again failed to breach its recent top at $0.6808.
Commodities are on a tear as ever-tightening sanctions on Russia have markets fearing major shortages of everything from oil to aluminium to wheat.
Coal contracts rose between 25% and 50% on Wednesday as buyers sought to replace Russian supplies. The Australian government said it was helping countries connect with local coal producers to fill the gap.
The impact of booming prices was evident in trade figures for January which showed Australia's surplus ballooned to A$12.9 billion ($9.39 billion) on higher coal and iron ore earnings.
That was the second biggest surplus on record and well above market forecasts of A$9 billion.
"Records will be broken in coming months if prices are sustained," said Taylor Nugent, an economist at NAB.
He estimated coal exports could double from their current monthly value of A$8.7 billion by April or May, once higher prices flowed through to contracts.
"A similar impact is likely to occur in LNG given contracts have pricing links to oil with a lag of around 4 months," he added.
The influx of cash will boost mining profits and tax receipts and underpin the Aussie as US dollar earnings are converted.
New Zealand has a different commodity mix and is a net importer of energy, but ANZ's index of commodity prices still climbed 3.9% in February to a record high.
Gains were led by a 7% jump in dairy, while the forestry index rose 4% and aluminium 8%.
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