ASX Small Cap Lunch Wrap: Could a weaker US dollar reignite global growth?

The sharp drop in the US dollar in July could be a ‘potent’ driver for global reinflation, says Oxford Economics.

Reinflation can describe the first phase of economic recovery after a recession, like the one we’re experiencing right now.

Because most world trade is denominated in US dollars (USD), changes in the USD relative to other currencies impacts global trade volumes.

A weaker dollar can lead to stronger trade volumes; stronger trade volumes can lead to economic recovery.

A weak USD is especially good for more volatile emerging market currencies (EM FX) allowing major emerging economies like Brazil and India to recover faster from the global COVID-19 recession.

The benefits of a falling dollar could also vastly outweigh the costs for the US economy itself.

“We see surer signs that the tide is turning for the US dollar, despite any near-term wobbles generating a safe-haven bid,” Oxford Economics director macro strategy Gaurav Saroliya says.

“USD weakness has typically been an essential prerequisite for global reflation. Outside of the Trump tax cuts of late 2017, inflation expectations have not moved higher without a weaker greenback.

“Sustained weakness in the dollar will be an especially potent driver of global reflation in the current global environment.”

 

WINNERS

Here are the best performing ASX small cap stocks at 12pm Friday August 7:

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CODE COMPANY PRICE CHANGE MARKET CAP
SUV Suvo Strategic Minerals 0.036 80.00% $24.6M
4DX 4DMedical 1.49 104.11% $394.5M
KZA Kazia Therapeutics 0.85 51.79% $53.0M
XTC Xantippe Resources 0.003 50.00% $8.0M
KTE K2 Energy 0.028 40.00% $8.4M
GED Golden Deeps 0.016 33.33% $5.6M
LPD Lepidico 0.009 28.57% $46.7M
RNE Renu Energy 0.025 25.00% $3.0M
ARR American Rare Earths 0.031 24.00% $9.6M
RMX Red Mountain Mining 0.009 21.43% $8.1M
KGM Kalnorth Gold Mines 0.017 21.43% $15.2M
EQE Equus Mining 0.018 20.00% $31.7M
AHL Ahalife Holdings 0.006 20.00% $4.0M
ESH Esports Mogul Asia Pacific 0.015 19.23% $30.7M
AQI Alicanto Minerals 0.095 18.75% $24.1M
AQD Ausquest 0.032 18.52% $22.4M
PGI Panterra Gold 0.052 18.18% $9.8M
MXC MGC Pharma 0.026 18.18% $41.2M
NWM Norwest Minerals 0.13 18.18% $10.9M

 

New WA strategic minerals explorer Suvo (ASX:SUV) is having a great first day on the ASX, up 80 per cent in morning trade.

The US Food and Drug Administration (FDA) has awarded ‘Rare Pediatric Disease Designation’ to Kazia Therapeutics (ASX:KZA) drug which treats a “rare and highly-aggressive” childhood brain cancer.

Scandinavia-focused gold-base metals explorer Alicanto Minerals (ASX:AQI) got a boost after Ray Shorrocks joined the board as non-exec chairman.

Shorrocks was former chairman of red-hot ASX300 company Bellevue Gold (ASX:BGL), and is current chairman of multi-bagger gold stock Auteco Minerals (ASX:AUT).

Equus Mining’s (ASX:EQE) was also up after announcing a new drilling program at the high-grade, development-ready Cerro Bayo silver-gold project in southern Chile.

 

LOSERS

Here are the worst performing ASX small cap stocks at 12pm Friday August 7:

Swipe or scroll to reveal the full table. Click headings to sort.

CODE COMPANY PRICE CHANGE MARKET CAP
ANL Amani Gold 0.001 -33.33% $7.8M
MGT Magnetite Mines 0.002 -20.00% $4.5M
DHR Dark Horse Resources 0.002 -20.00% $8.1M
TIA Tian AN AU 0.17 -19.05% $18.2M
LSR Lodestar Minerals 0.011 -15.38% $9.4M
AEF Australian Ethical Invest 5.1 -14.86% $572.0M
SMX Security Matters 0.36 -14.29% $46.5M
WTL Wt Financial Group 0.03 -14.29% $5.3M
ENA Ensurance 0.012 -14.29% $6.9M
TKL Traka Resources 0.025 -13.79% $10.0M
AKG Academies Australasia Group 0.2 -13.04% $25.5M
ANA Ansila Energy 0.02 -13.04% $10.2M
GMV G Medical Innovations 0.055 -12.70% $39.3M
XTD XTD 0.04 -11.11% $5.5M
ORN Orion Gold 0.017 -10.53% $49.3M
RTG RTG Mining 0.13 -10.34% $95.6M
SGC Sacgasco 0.026 -10.34% $8.1M
RLC Reedy Lagoon 0.009 -10.00% $3.6M
GME GME Resources 0.036 -10.00% $18.2M

 

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