DXY has stopped falling and that’s about all we can say about it.
AUD is the reverse.
CNY same, same.
Gold is volatile! Oil jumped on possible new Russia sanctions but it is stuffed.
Not so AI metals.
RIO is the chosen AI metals king.
EM can’t run without DXY gfalling.
Junk is stuck.
US yields are down, down.
Stocks can’t shake geopolitics.
AUD is jammed against a mounting wall of worry. Trade wars, Trump vs Xi, Japanese leadership change, AI bubble, debasement, European woes, stock and commodity bubbles, local unemployment.
It is simply too much for the currency to find or lose its footing, as no single variable can predominate.
So, we are stuck.
My feeling is higher is still more likely with fat tails for lower, given we are probably early, not late cycle, in the US.
But even this is in doubt, as the Fed will likely cut next week into a soft labour market despite firm inflation.
I guess what I am saying is that until we get a resolution on one or more of these material issues to tip the balance bullish or bearish, the currency is a bit of a stoner.
