Collinson FX Market Commentary - Dec 23 - Xmas comes but once a year
by Collinson FX on 23 Dec 2016
Start of PIC Coastal Classic - October 21, 2016 - Richard Gladwell
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Collinson FX Market Commentary - Dec 23 - Christmas comes but once a year
Pre-Xmas activity trod a familiar ground and markets were static. The Dow remains poised, with the 20,000 beckoning, while the Dollar holds bullish levels. US GDP improved to 3.5%p.a., with consumer sentiment pushing activity higher, thus buoying confidence.
The EUR traded 1.0440, while the GBP slipped to 1.2300, reflecting a drift in the reserve. The impetus to break the DOW 20,000 mark was left hanging in the wind, as Durable Goods Orders contracted, while Leading Indicators were in flux.
NZ GDP improved to 1.1%, pushing the annual rate to 3.5%, while the current account was flat. The currency reflected the improved economic data, holding 0.6900, while the AUD meandered to 0.7210. Xmas dominates quiet markets.
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Collinson FX Market Commentary - Dec 22 - NZ empties data box
Markets drifted in a quiet week before Christmas. The Dollar remains bid and analysts await the Dow reaching 20,000.
Economic data releases are few and far between in Europe and the US during the lead up to the Xmas holidays. Existing Home Sales moved into positive territory, joining all recent housing data, confirming the rise in confidence. The GBP traded 1.2350, while the EUR slipped to 1.0430, mired in the latest Muslim terror attack in Germany.
NZ is the one country which seems to be emptying the economic data box before Xmas. The latest trade data confirmed a deterioration in both exports and imports, extending the deficit. This leads into today's numbers of the current account and GDP.
These numbers are expected to be steady, but any major downside surprises could have a serious impact on a vulnerable KIWI, which is now testing 0.6900. The weakness in the NZD has been a reflection of reserve strength, although the AUD has fared slightly better, trading around 0.7250.
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Collinson FX Market Commentary - Dec 20 - Downward revision for Aus
US markets were positive to open the last week before Xmas. The Yen strengthened to 116.50 ahead of the Bank of Japan policy statement today, after a two day deliberation, with some expecting minor adjustments.
Equities were positive,while US bond yields drifted, allowing the Dollar to meander. The EUR traded 1.0440, while the GBP slipped to 1.2415, with economic conditions still challenging.
In Australia the Mid Year budgetary update (MYEFO) was released, which was not as bad as expected, although a substantial revision downwards of the budgetary position.
Tax revenues continued to decline, while the Government attempted to curb expenditures, while GDP growth numbers were reviewed lower.
All very depressing economic news for Xmas, but most had expected worse, thus the impact on the currency was marginal.
The AUD drifted to 0.7250, while the NZD continued to decline, after breaking the important 0.7000 level on the downside. The NZD could continue to drift lower to close the year if the slew of economic data releases this week are sufficiently negative.
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