Middle East fears flared again overnight, with missile attacks on the UAE, while Trump announced ‘Project Freedom’ to free ships trapped in the Persian Gulf. The US/EU trade wars also reignited, with Trump announcing an increase to 25% tariffs on EU Auto’s, for apparent failures from the EU to comply with the earlier trade agreement. The US Supreme Court announcement that some tariffs were not enforceable, which encouraged the EU to stray from the earlier FTA. The US Dollar rallied as market fears jumped, with the EUR falling back below 1.1700, while the GBP headed back towards 1.3500.The rising reserve hit commodity currencies, with the AUD tumbling back towards 0.7150, while the NZD surrendered 0.5900. Local markets will be focused on the RBA today, with the likelihood they will once again raise rates, as inflation accelerates. The RBA has not been able to get a grip on inflation, with the fiscal deficit blow-out and rising energy prices, negatively impact the Australian economy.
