Collinson FX: April 24: Safety flows again moved towards the US Dollar - amid rising tensions.
by Collinson FX 24 Apr 12:58 NZST
24 April 2026
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April 24: Economic crisis ahead for Brits?
Tensions are on the rise again in the Middle East, following news that the US had intercepted three Iranian tankers in Asian waters and imposed ‘shoot to kill’ orders on any vessel laying mines in the Strait of Hormuz.
This follows the refusal of Iran to return to the negotiating table, while the fragile ceasefire, was temporarily extended by the US.
Safety flows again moved towards the US Dollar, with the EUR slipping below 1.1700, while the GBP surrendered 1.3500. UK Gilts are moving into dangerous territory, and this could be the signal that big economic problems are not far off, for the British economy.
The rise in the reserve hit commodity currencies, with the AUD falling back below 0.7150, while the NZD crashed back below 0.5900. Energy dependent Countries, including NZ and Australia, remain extremely vulnerable to supply issues and the heavy costs imposed by spiking inflationary pressures flowing through their economies.
?April 21: Stare-Down
Markets opened the week in a state of nervous apprehension, as the ceasefire deadline is set to expire, and the US seized and boarded an Iranian ship.
Negotiations are set to resume, prior to the expiration of the ceasefire Tuesday, and hopes are high for a resolution.
Trump has escalated threats and rhetoric, warning of dire consequences for Iran if an agreement is not reached.
The US Dollar held steady, with the EUR trading just below 1.1800, while the GBP golds above 1.3500.
The PBoC held interest rates steady, as expected, while NZ trade data showed increases in both exports and imports. This reflects the inflated dollar value rise in prices during the Middle East crises. Markets await results from Islamabad.
April 20: The Dire Straits
On Friday, Iran declared the Strait of Hormuz open and markets roared back to life in response. US equities surged deep into record territory and oil prices collapsed. It appeared that the war in the Middle East was over.
It was a moment of relief for the global economy and the energy supply as since then, Iran reversed it's reopening of the crucial waterway and fired on ships attempting to pass. This was in retaliation to the United States pressing ahead with it's blockade of Iranian ports.
Economic data was largely overlooked as celebrations in the US markets closed out a week of big gains. Post the opening, the EUR climbed back above 1.1800, while the GBP headed towards 1.3600. These have since retreated to 1.1730 & 1.3500 respectively.
Commodity currencies were beneficiaries of this Geo-Political solution, as they have been exposed for their vulnerabilities, in the energy supply space. This enabled the AUD to look towards 0.7200, while the NZD will attempt to regain 0.5900. The energy dependence of both Australia and NZ, on global supply, must now be addressed and they must now look for some independence and domestic production.
April 17: Markets hit record highs
US equity markets were joined by the Japanese Nikkei in trading at record highs, satisfied that the Middle East war is all but over.
Trump said as much, reassuring markets that the war was ‘close to over’. Markets did not need a second invitation and equities soared to record highs, while bond yields settled.
Attention turned back to economic data, with EU inflation only marginally higher, while UK GDP growth was stronger than expected. There will be an impact, but this will be treated as a temporary blip, rather than a change in trend. The EUR settled above 1.1750, while the GBP held above 1.3500.
Australian employment numbers confirmed little change, and despite the domestic energy crises, conditions look likely to return to normal.
Chinese GDP growth surged to 5% annually, much better than expected and good news for commodity Countries.
The AUD traded above 0.7150, while the NZD faltered, slipping back below 0.5900.
April 16: Heading for a High:
US equity markets are trading back up towards record highs, brushing off the Middle East conflict, concluding a deal is close.
Global markets appear more nervous, watching oil prices and the flow of shipping through the Strait of Hormuz.
The safety flows to the US Dollar are drying up with the EUR knocking on the door of 1.1800, while the GBP trades around 1.3550. High and deficits and debt are a breaking point, in many Western Countries, but the energy crises will only remain in areas that welcome sanctions and Net-Zero.
The falling reserve has allowed the NZD to regain 0.5900, while the AUD has surged above 0.7150. Australian employment data will be watched closely today, as will Chinese GDP growth, in local trade.
April 15: A blockade rally:
Markets rallied overnight, with bond yields drifting lower and US equities heading back towards record highs.
The failure in peace negotiations between Iran and the USA was brushed off. The US blockade and the far-reaching consequences of such a move surprised the Iranians. Communications resume.
The US Dollar continued to decline, with the EUR surging to 1.1800, while the GBP hit 1.3570.
The RBNZ warned of a looming inflation explosion and rate rises would be needed, if the inflation balloon materialised. Not if the war concludes and this is a temporary bubble. The NZD continued to gain ground, hitting 0.5900, while the AUD powered through 0.7100. Chinese imports surged, in the last month, reflecting the provisioning for a crisis.
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