Markets remain nervous, considering the over-investment bubble in AI, or whether it exists at all? The US Dollar attracted more flows, allowing the EUR to retreat to 1.1550, while the GBP slipped to 1.3080. UK inflation softened, falling to an annualised 3.6%, allowing some speculation the Bank of England may cut rates at their next meeting.The Yen has come under pressure and there is speculation that the Bank of Japan may intervene. The fallout with China will have impact, while inflation is an increasingly serious problem, which the Bank of Japan are reticent to address. Japanese bond yields have risen to twenty-year highs and the new PM is under pressure. The AUD continued to stumble, falling to 0.6460, while the NZD crashed to 0.5600. Commodity currencies are under pressure, while the NZ PPI (wholesale inflation report) was softer than expected, allowing the RBNZ some space to manoeuvre.
