Australian dollar tractor at new highs

DXY can’t get off its knees.

It’s not an AUD rocket so much as a tractor slogging it uphill.

The big short is excellent support.

Lead boots OK too.

Machines are into oil.

Metals no bueno.

Fugly miners.

EM thinks it can.

Junk funk.

Yields sticky.

Stocks only go up.

Nothing much has changed. The Trump TACO is being tested as we go higher.

For FX, AUD remains a good one-way bet given that less TACO means falling DXY and more TACO means falling DXY.

The headwinds of weak global growth and fading China are keeping the move modestly paced, but a higher AUD is still the play.

The big risk remains the fat DXY short, but there’s no obvious catalyst to squeeze it yet.

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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.