Jack Cook has an excellent post suggesting the Australian dollar could plunge. He points out that copper is used in a lot of industrial processes. It’s price is driven up in good times and crashes in bad.
Jack is betting that the correlation reasserts itself:
I suspect we will see a big move one way or the other. It could be copper soars. But for now, I’m betting the Aussie tanks.
For completenesses sake it is worth mentioning that it could be a bit of both or the correlation could simply be over.