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Why is the Rio Tinto share price rebounding strongly on Thursday?

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It’s been a very pleasing day on the whole for the S&P/ASX 200 Index (ASX: XJO). After some heavy losses earlier in the week, the ASX 200 is rebounding strongly today, up 0.95% at the time of writing to around 7,330 points. But it’s been an even better day for the Rio Tinto Limited (ASX: RIO) share price. Rio shares are currently up a healthy 2.34% at $111.51 each. That comes after some steep selling earlier this week.

So why are Rio shares surging higher today?

Well, we can’t be completely certain. The company hasn’t released any news itself today. However, looking at the market, we can take a guess. The materials and metals and mining indexes on the ASX 200 are the top two performing sectors so far today. So Rio is certainly not alone in its gains. Its peers like BHP Group Ltd (ASX: BHP) and Fortescue Metals Group Limited (ASX: FMG) are also surging, both up even more than Rio. Fortescue’s shares have risen an eye-popping 5.82%.

These moves come as the iron ore price sees a rebound. According to Trading Economics, iron ore rallied overnight to US$137 a tonne. The Aussie dollar has also fallen in recent days. It’s now at just over 71 US cents, down from over 72 earlier n the week. A falling dollar makes exports from Australia cheaper to buy for foreign buyers, which is good news for miners like Rio.

So a rising iron ore price, and a falling Aussie dollar is the likely reason why iron ore miners like Rio, BHP and Fortescue are rallying today. This is no doubt coming as a relief for Rio investors, who had to watch the company lose around 4% of its value over Tuesday and Wednesday’s trading.

At the current Rio Tinto share price, this ASX 200 mining giant has a market capitalisation of $40.44 billion, with a trailing dividend yield of 9.75%.

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