Tensions are on the rise again in the Middle East, following news that the US had intercepted 3 Iranian tankers in Asian waters and imposed ‘shoot to kill’ orders on any vessel laying mines in the Strait of Hormuz. This follows the refusal of Iran to return to the negotiating table, while the fragile ceasefire, was temporarily extended by the US. Safety flows again moved towards the US Dollar, with the EUR slipping below 1.1700, while the GBP surrendered 1.3500. UK Gilts are moving into dangerous territory, and this could be the signal that big economic problems are not far off, for the British economy.
The rise in the reserve hit commodity currencies, with the AUD falling back below 0.7150, while the NZD crashed back below 0.5900. Energy dependent Countries, including NZ and Australia, remain extremely vulnerable to supply issues and the heavy costs imposed by spiking inflationary pressures flowing through their economies.
