The S&P/ASX 200 Index (ASX: XJO) is having a pretty momentous day today. On the surface, the ASX 200's 0.66% gain (at the time of writing) doesn't look like much to write home about. But this gain means that the ASX's flagship index is now at a post-COVID high. And we'll only need another 1% or so to exceed the pre-COVID high on top of today's levels from February 2020 as well. But one ASX blue chip is performing even better than the ASX 200 today. And that's the Rio Tinto Limited (ASX: RIO) share price.
While the ASX 200 is up 0.66%, Rio shares are up a decent 3.04% today to $117.80 a share. That's still not quite at Rio's all-time high of $130.30 that we saw back in late February. But it's also a good 10% above where we saw Rio shares just a couple of weeks ago in late March.
What's more, Rio shareholders received their $5.17 per share dividend this morning. So it's certainly been a good day to hold this ASX miner.
So what is driving Rio shares higher today?
Rio shares: Paying the iron price
We can almost certainly thank the twin pillars of Rio's profitability – the Aussie dollar and commodity prices – for the appreciation we have seen today in the Rio share price.
Firstly, the Aussie dollar is now back above 77 US cents after spending most of the past month closer to 75 cents than 76. Since commodities are almost always priced in US dollars, a rising Aussie dollar makes it cheaper for Rio to sell its commodities in Australian dollar terms. And that is naturally positive for Rio shares.
Secondly, commodity prices have been on a tear in recent weeks. Rio's largest operations are in iron ore production. And iron ore is now back to sky-high levels above US$170 per tonne after dipping towards US$150 a few weeks ago. Additionally, copper prices are also at historical highs, as my Fool colleague reported earlier this week.
What's more, the rise of electric vehicles is tipped to push copper even higher over the coming years. Oil is also pushing higher this week with Brent crude is now above US$66 a barrel, whilst gold is holding steady at around US$1,740 an ounce.
All of these factors are adding up to a perfect storm of sorts for the Rio Tinto share price today. Along with other ASX resources shares. And Rio shares' trailing dividend yield of 5.22% probably isn't hurting investor sentiment either.
