New mining royalty could further weigh on AUD

I’m in favor of some resource taxes but the timing on this one couldn’t be worse.

Yesterday, the state government in Queensland, Australia introduced a larger-than-expected royalty on coal production.

“Today’s royalty increase created the perfect storm for Queensland coal producers when combined with the high foreign exchange rate, lower commodity prices and the introduction of the carbon tax,” said Seamus French, the chief executive of Anglo American’s metallurgical coal business.

“In the short term it will result in job losses, and in the long term it will significantly disadvantage Queensland against alternative supply regions such as Canada and Mozambique, which enjoy both lower costs and lower tax regimes.”

Anyone up for a short Australian dollar, long Mozambican metical?

AUD/USD still struggling with downtrend resistance (and the 61.8% fibonacci) at 1.0450.