DXY rebounded, but the former support is still resistance.
AUD didn’t care. The safe haven held.
CNY supportive. JPY pulled back.
Gold is a Middle Eastern missile. If oil follows…
If oil follows then it will drag much of the commodity complex with it.
Witness metals.
Mining rocket.
EM rocket.
Junk rejection.
As yields warm with oil.
Stocks stuck ATH.
American chaos continues.
- After the madman’s pronouncements on DXY yesterday, TS Scott Bessent declared for a “strong dollar” and no JPY intervention.
- The madman appears ready to bomb Iran back to the dark ages. I doubt this is a TACO because Iran will refuse any nuclear agreement, and is Trump just going to sail away? A fake disarmament agreement could be the solution.
- The Fed offered a dovish hold but was clearly more confident about the economy and the job market.
These are three very good reasons, each on its own, to dump the AUD. Add that DXY rocketed.
Yet the clearest message in all of it is American chaos across monetary, fiscal, currency and geopolitics.
So the AUD went up, backed by the now inevitable RBA hike.
Australia is now in a countdown to recession. A roaring AUD and energy shock, rate hikes, and fiscal retrenchment will smash the consumer and non-mining tradable economy in short order.
It is bizarre to observe that fiscal and energy mismanagement has delayed an energy shock from 2022, only for it to occur simultaneously with another in the oil sector in 2026, leading to out-of-cycle rate hikes.
Jim “chicken” Chalmers is a rare macroeconomic mismanager.
The AUD will continue to rise until something big enough breaks.
