Australian dollar gazumped by tariff shock

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DXY is falling again after Liberation Day tariff announcements.

AUD was up big, down big, then did little.

Lead boots will be interesting today.

Gold to the moon. Oil toppy.

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Base metals are screaming “hard landing”.

Big mining’s big bear knows no bottom.

EM meh.

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Credit not stressed enough.

Yields fell as growth worries mount.

Stocks rose.

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But S&P futures are down 1.5%.

Liberation Day applied reciprocal tariffs and a baseline 10% to all nations. Australia got off lightly.

Australia is the master of the non-tariff barrier, most especially in agriculture.

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Does anyone remember that we used to be sprayed with pesticide by the hostesses on inbound flights in the 1980s?

Anyways, markets appear to be saying that it’s not terrible for Australia and the AUD. While it is terrible for global and US growth.

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I’m not sure how it reaches that conclusion.

This looks rushed, chaotic and likely to derail all manner of business investment in the US and everywhere else.

I can’t see how that is good for AUD.

About the author
David Llewellyn-Smith is Chief Strategist at the MB Fund and MB Super. David is the founding publisher and editor of MacroBusiness and was the founding publisher and global economy editor of The Diplomat, the Asia Pacific’s leading geo-politics and economics portal. He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.