The US Dollar continued to crumble against other ‘fiat currencies’ and even more against hard commodity assets. Gold, Silver and other precious metals have been on a tear, for more than a month, and not just from demand and mismatches in the derivative markets. The US Dollar is the measure of hard commodity prices, and this does reflect on the health of the reserve currency. Trump looks to increase tariffs on South Korea, from 15% to 25%, for not signing the previously agreed Trade Agreement. India signed the ‘Mother of all Trade Agreements’ with the EU, circumventing many of the Russian sanctions from the US/EU and following the much-maligned EU deal with South American Countries. The US Dollar slumped even further, with the EUR heading towards 1.2000, while the GBP looks to top 1.3800.
Commodity currencies were also beneficiaries of the weak reserve, with the AUD charging towards the psychological 0.7000 mark, while the NZD regained the ‘Big Figure’ of 0.6000. Geo-politics remains a constant threat to market stability.
