Australian dollar falls through EUR trap door

David Llewellyn-Smith

Monday 17 April 2023

DXY continued its bounce off support last night as EUR contracted:

Australian dollar fell again:

Oil and gold pulled back:

Dirt is in the great sideways:

Miners firmed with iron ore:

EM yawn:

Junk yawn:

Yields are fast pricing out any US credit crunch:

Stocks only go up:

It’s not terribly convincing in any way. The stock rally has once again overcooked everything and yields are rising to cut it off.

Previous bouts of this dynamic have resulted in downdrafts for the AUD as EUR retraces violently. The same setup is in play again with EUR hugely overbought.

For no reason at all:

Europe is only trailing the US into a recession by a quarter and the ECB is still much more bullish than the Fed.

Remember, where the EUR goes, the AUD follows:

About the author

David Llewellyn-Smith is Chief Strategist at the MB Fund and MB Super. David is the founding publisher and editor of MacroBusiness and was the founding publisher and global economy editor of The Diplomat, the Asia Pacific's leading geo-politics and economics portal. He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.