BHP Billiton: For This Miner, Recent RBA Rate Cut Blessing In Disguise
Rayman Partners | Feb 07, 2015 01:45AM ET
Iron ore prices are approaching 25 basis points to revive the Australian economy. Traders expect the RBA to cut interest rates further by 0.25% in March. Since the beginning of the year, the Australian dollar depreciated more than 4% against the U.S. dollar. Recently , the U.S. dollar index crossed the 94 mark.
A stronger U.S. dollar will increase pressure on the Australian dollar. Further rate cuts by the RBA will weaken the Australian dollar, which will lead to operational cost savings. BHP Billiton’s FY 2015 profit after tax increases $45 to $46 a tonne.
Final Thoughts
The rate cut by RBA is a blessing in disguise for Australian miners including BHP Billiton. The rate cut will lead to production cost savings amidst lower iron ore prices.
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