Energy prices remain elevated for an extended period, driven by falling Russian supply, and rising demand from a re-opening China. Also, the transition to renewables will provide demand for energy in production and construction of renewables, particularly as production scales.

I initiated a position last month. It was the wrong call, with energy prices continuing to rise.

As long as energy prices remain high, the Aussie dollar will do well.

However, high prices will ultimately be cured by high prices, it is just taking longer than many were expecting.

In a inflationary/deflationary environment, the USD tends to outperform the AUD.

The AUD has lost about 8% of its value against the USD since early April. High energy and food prices, in conjunction with tightening monetary policy is likely to result in a global economic slowdown. We are already experiencing base metal prices collapsing, which is an early warning sign of deflation.

USD is a safer place to hold cash in an environment of decelerating growth. Although, this fund is geared, which increases volatility.

RISK - China initiates looser monetary policy, stimulating infrastructure & investment. This could be counter the deceleration in global growth.