Australian Dollar has collapsed through its price supports, I caught the two day trade. The Federal Reserve may trigger a 0.75% increase at their June meeting. Inflation is now out of control. A Strong U.S. Dollar will sink Asian and Oceanic currencies. May lead to a Asian/Australian currency crisis.
Caught the Australian Dollar sell off from the 2022/06/07 at 0.71977 to the 0.71385 (2022/06/08) as the AUD collapsed under the 0.716 support (Chart 1 above, note red line). The AUD is now sitting at 0.70, with all its price supports gone and risk aversion turning very nasty as global stagflation is becoming a reality, that be a recession with inflation on top. Central Banks, namely the Federal Reserve should be putting on the breaks as quickly as they can to retain validity as financial stabilizes for the global economy, to which the Fed is losing credibility by the day. So far, their responses from denial earlier on to acceptance that inflation is it of control, triggering a rather benign increase in rates, at 0.25% through to 0.50%. I believe that at the Fed's upcoming meeting they will set the rate at 0.75%.
Chart 2, With price channels set and the AUD interest rate very low compared to the U.S Dollar. If the Fed do trigger a 0.75% rise, I see the AUD dropping between 5%, 10% and even 20%. Unless the Australian Central Bank does an emergency rate hike soon after the Fed's June decision.
Could Japan's collapsing Yen set off another Asian currency crisis?
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