Australian dollar eaten

Monday 18 May 2026

As the short war turns long and oil-led inflation is embedded in the outlook, DXY is rising, or EUR falling, or both.

Japan is having a lot of trouble stabilising JPY. With the coldest bond market on earth and the highest external oil dependency just about anywhere, this market is one to watch as a global crash canary.

IT may not be fully dead but sure ain’t chirping. There’s CNY support for AUD, but if JPY lets go, I would expect AUD to follow.

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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.