Markets are in a state of revolution at the moment, with AI as the trigger. AI requires unprecedented and massive electricity production, which cannot and will not, be provided by just renewables. This will require an ‘all of the above’ solution, including nuclear, thermal, hydro and fossil fuels. The production, transmission and consumption of this electricity requires vast amounts of precious metals, including copper, silver, palladium etc. This changes the whole world and is reflected in the record price runs of precious metals. We have even seen the crash in software companies, as AI re-imagines their whole operating model. This will spread to other sectors as the impact of AI is considered. The USD is a symptom and all fiat currencies are now under scrutiny.
The AUD has been surging in the last week and has broken back above 0.7100, achieving multi-year highs. This is a direct result of a battered reserve currency and resurgent commodity prices. These all bode well for the AUD, which is heavily influenced by the record pricing of commodities and more especially, precious metals. The reversal of inflation in Australia, has determined the RBA will hold interest rates at elevated levels, and support the currency even more.
The current interbank midrate is: AUDUSD .7052
The interbank range this week has been: AUDUSD .6880 - .7091
The last month has seen the precipitous decline in the US Dollar, allowing the EUR to surge back to above 1.2000. ‘A rising tide lifts all boats’ and most currencies rallied strongly on the crippled reserve. The NZD/EUR cross did improve from 0.5000, up towards 0.5100, as commodity currencies come into favour. Commodity prices are surging, so this slight upward bias, is likely to continue.
The current interbank midrate is: NZDEUR .5080 EURNZD 1.9685
The interbank range this week has been: NZDEUR .5011 - .5083 EURNZD 1.9673 - 1.9950
The NZD/AUD cross-rate hit lows, not seen since the GFC, falling below 0.8600. This has been largely due to the consistent interest rate cut regime from the RBNZ, over a period of time, thus increasing interest rate margins. This has seen investment flows from the NZD to the AUD. This has stabilised, in the last couple of weeks, as inflation returns to both NZ and Australia, meaning future rates cuts are a way off. Unprecedented rises in precious metal prices favour the AUD.
The current interbank midrate is: NZDAUD .8615 AUDNZD 1.1590
The interbank range this week has been: NZDAUD .8588 - .8637 AUDNZD 1.1565 - 1.1643
The GBP has been a beneficiary of the precipitous fall in the US Dollar, but to nowhere near the level of the Australian Dollar. The AUD/GBP cross-rate has surged through 0.5100 and is likely to continue on it’s upward trajectory. The AUD is a major beneficiary of the rise in precious metals, which they are experiencing in an unprecedented run upwards, to never seen before record levels. This is likely to continue.
The current interbank midrate is: AUDGBP .5105 GBPAUD 1.9588
The interbank range this week has been: AUDGBP .5051 - .5123 GBPAUD 1.9516 - 1.9795
The NZD is on a tear, at present, charging all the way up towards 0.6100. Inflation has reversed the downward direction, with an annualised reading of 3.1%, in the December Quarter. This has combined with the dramatic collapse in the US Dollar, over the last month and the rise in commodity prices. The rebound in inflation will prevent further rate cuts from the RBNZ and this will support the currency.
The current interbank midrate is: NZDUSD .6075
The interbank range this week has been: NZDUSD .5895 - .6093
The GBP has also been a beneficiary of the dramatic decline in the reserve currency, climbing as high as 1.3850. This has all but been matched by the NZD so the cross-rate has traded in a relatively tight trading range between 0.4350 to 0.4400. This is likely to continue with all of the volatility in the US Dollar. Although commodity currencies are favoured.
The current interbank midrate is: NZDGBP .4402 GBPNZD 2.2717
The interbank range this week has been: NZDGBP .4351 - .4403 GBPNZD 2.2710 - 2.2954
