US equity markets crashed overnight, following an Iranian missile attack on US forces in the Middle East. A response is expected, thus escalating the crises and scaring markets. US equities tumbled and especially impacted, are the AI and chip shares. This sector is considered inflated in value, with the competition from China, which would render them massively overpriced. Chip development in China is surging ahead on a massive scale, enabling AI to seriously challenge US dominance in the AI sector, with China already enjoying a huge energy advantage. The US Dollar drifted following the Fed’s decision to hold rates steady, with the EUR regaining 1.1400, while the GBP pushed back above 1.3300.The Fed’s rate decision was expected, but this is further evidence of the intentions of the new Fed Chairman, to keep rates as low as possible. The Fed also confirmed strong US economic growth and investment. Commodity currencies were supported by the Fed’s inaction, with the NZD heading back towards .5800, while the AUD recovered back to 0.6950. Earlier, in local trade, the AUD has crashed to 0.6930 following the release of inflation data. Inflation was negative for June and lower than expected for Q2. The headline rate fell from 4.1%, to 3.9%, easing pressure for further rate rises and cutting the AUD.
