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Australian dollar turns world’s whipping boy

Published 18/07/2024, 08:49 am

DXY was belted and EUR took off last night:

AUD was pounded anyway:

Even as North Asia catapulted higher:

Oil and gold are up:

Metals smashed:

Miners look like retesting lows:

EM flamed out:

Junk is fine:

Treasuries are bid:

Stocks are not:

There are lots of cross-currents here:

  • Fed’s Williams and Waller suggested a September rate cut. DXY negative.
  • Trumponomics was established as high tariffs, low taxes. DXY positive. Goldman reckons it is 1% off EUR GDP:

Not to mention North Asia!

  • Commodities were hosed on weakening growth, as well as Trumponomics.
  • Joe Biden also looks increasingly likely to be replaced, adding more uncertainty.
  • The stock bubble is bursting a little on all of the above, as well as renewed China chip curbs.
  • AUD was smacked because it is high beta.

It looks like the pre-election calm is breaking down and AUD is doing its risk-adjusted thang.

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