The war in the Middle East erupted once again, with both the US and Iran exchanging missiles and bombs. Iran closed the Straits of Hormuz and President Trump responded by imposing a blockade. Things went south very fast. Oil prices surged, along with global bond yields. Equity markets remain under pressure and the safety of the US Dollar was sought, once again. The EUR tumbled below 1.1400, while the GBP fell back to 1.3350.The resurgent reserve put downward pressure on the AUD, which fell back towards 0.6900, while the NZD aims to hold 0.5750. The heat will be on these currencies if the latest chaos in the Middle East continues. The energy crises may well re emerge and this will add inflationary pressures.
