US equity markets closed out the week at, or near, record highs. Iran is said to have lodged a new peace proposal with Pakistan, for the USA to consider, while the tenuous ceasefire remains in place. Oil Prices softened, but remain above US$100pb, as the blockade of the Strait of Hormuz remains in place. European growth has stalled and inflation is spiking, as is the case in NZ/Australia and other energy dependent economies. US growth was strong in Q1, 2%p.a., while inflation increased marginally. The US Dollar remained tame, with the EUR trading above 1.1700, while the GBP drifted below 1.3600.
The softer reserve allowed the commodity currencies to consolidate, with the AUD trading around 0.7200, while the NZD endeavours to hold 0.5900. The RBA will meet this coming week and they are expected to recognised increasing inflationary pressures, raising interest rates. This will only add to attractive interest rate differentials and probably provide further support the currency.
