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Collinson FX: Collinson FX: March 14 - US hits 40yr Inflation high

by Collinson FX 13 Mar 01:55 PDT 13 March 2022
29er start - Oceanbridge NZL Sailing Regatta - Day 4 - Takapuna BC February 20, © Richard Gladwell / Sail-World.com / nz

Collinson FX: March 14 - US hits 40yr inflation high

Markets closed lower Friday, to close out a week of losses, on equity markets. The sanctions imposed on Russia are impacting global markets hard. The repercussions of a Russian response to sanctions could be crippling for Europe, as they have a heavy dependency on Russian energy and agriculture. This will drive already rampant inflation even higher. US CPI came in at 7.9%, a new record high, for the last forty years. This can only deteriorate further. The EUR has fallen to 1.0900, while the GBP has slipped to 1.3035, ahead of the Bank of England Rate Decision this coming week.

Commodity currencies have suffered once again, with the AUD falling below 0.7300, while the NZD below 0.6800. The Fed meets this coming week and they have indicated they will raise rates by 25 basis points. A failure to act will stimulate equities but further antagonise spiralling inflation. The Bank of Japan will also announce their latest rate decision, but their inflation issues are nowhere near as pressing

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