AUD -
With the war continuing at seemingly the same pace every day and the President repeating that the war is "completely" every other day, I thought it best to widen our focus slightly. AUD has been by far the best performing G-10 currency of the year so far, rallying 5.95% so far. This is based mostly off high Australian inflation making a strong case for the RBA to be the only G-10 central bank hiking in 2026.
The RBA did indeed hike, but gave us some of the first official concerns regarding the impact of the war on domestic economies. Australia imports much of its Oil from Malaysia and Indonesia, 79% of all energy in fact and so is exposed to the rapid rise in Oil prices seen.
RBA speakers were especially concerned about petrol prices causing general inflation, a very real concern in such an import heavy large country. Speakers went on to suggest that Australia's hitherto good growth figures could turn negative if there is no swift conclusion to the war in Iran.
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