Collinson FX Market Commentary - Feb 6, 2016 - USD rebounds

by Collinson FX on 7 Feb 2016 Collinson FX Market Commentary - Feb 6, 2016 - USD Click here to find out how to get Collinson FX's free iPhone app

Feb 6 - U.S. Equities tanked to close Friday in New York after stronger than expected employment data. U.S. Unemployment fell to 4.9%, adding to the script proposed by the Fed, of economic recovery. This is a risk off play, boosting prospects of further tightening of Monetary Policy, hitting equites and supporting the recently flayed Dollar.

The EUR retraced to 1.1150, while the GBP slipped to 1.4500, as the Dollar rebounded. The rising reserve hit the resurgent commodity currencies, with the AUD plunging to 0.7070, while the NZD dipped to 0.6625.

The RBA Monetary Policy Statement described a sunny domestic economy but observed the crash in commodity prices was having an impact evidenced by the falling AUD. Central Bank activity and commentary remains the big driver of equities and currencies although economic data is influential.

Collinson FX Market Commentary - Feb 5, 2016 - Currency wars continue
Feb 5 - Currency markets came out from the shadows for the second day running, with serious moves from the Dollar, sending shockwaves through markets. Global Economic conditions have not recovered, as vaunted, deteriorating with debt at much more dangerous levels than pre-GFC!

Western economies have not curbed spending and deficits have continued to expand adding to debt levels. This has been hidden by record low interest rates but this is seriously threatening.

Growth has not been delivered, as predicted in Asia, Europe or the U.S.. The Fed has been walking away from telegraphed interest rate rises, after the December increase, due to global QE. You cannot swim against the current and global economic conditions will force the Fed to relax monetary policy. The huge unwind in the Dollar has been demonstrable over the last two days with the EUR moving up to 1.1200, while the GBP tests 1.4600 after the Bank of England left rates unchanged.

The ECB and Bank of Japan both came out with guns blazing, returning fire in the currency wars, fighting the wounded Dollar. Undermining currency values is central to trade enhanced recovery and Central Banks are engaged.

The collapse in the reserve have bolstered commodities and the associated currencies. The NZD has spiked through 0.6700, while the AUD attacked 0.7200, enhanced by improving local data. Markets are fully engaged in currency wars and this is the major driver in volatile markets.

Collinson FX Market Commentary - Feb 4, 2016 - USD crashes, others up
Feb 4 - Currency markets exploded overnight with the Dollar being hit hard across the board. New York Fed President, Dudley, noted the impact of the high Dollar on trade and the looming global downturn. This translated into a capitulation on telegraphed tightening of monetary policy.

The Dollar crashed, with the EUR heading towards 1.1100, while the GBP approaches 1.4600. Commodity currencies experienced similar gains, with the NZD surging to 0.6650, aided by stronger than expected employment data and hawkish comments from the RBNZ Governor.

The AUD jumped to 0.7150, boosted by the reserve and strong Building Approvals. The commitment to raising rates in the U.S. was alway wishful in the light of global QE and the unwind of the Dollar is underway.

Collinson FX Market Commentary - Feb 2, 2016 - Oil spirals down

Feb 2 - Equities remained flat as the Oil price continues to spiral downwards. Oil is now is testing the $30/barrel mark, hitting the perfect storm, flagging demand and relentless supply.

The Dollar managed to book some gains, with the EUR slipping to 1.0825, while the GBP crashed to 1.4400! NZ Commodity prices contracted 1.8%, reflecting Dairy prices, confirming the slack commodity demand.

This has directly impacted the currencies, with the NZD trading 0.6525, while the AUD consolidates below 0.7000. Global markets remain the main driver of equities and currencies, while Geo-Political turmoil creates uncertainty, hitting confidence.

For more on Collinson FX and market information see:
www.collinsonfx.com and www.collinsonwealthmanagement.com

Countries: | NZ: 0800 338 838 | AU: 1800 143 415 | NY: 1888 6257 833 | UK: 0800 0285 834 |

Disclaimer: The details expressed in this website and accompanying documents or transmissions are for information purposes only and are not intended as a solicitation for funds or a recommendation to trade. Collinson Forex Ltd accepts no liability whatsoever for any loss or damages suffered through any act or omission taken as a result of reading or interpreting any of the information contained or related to this site.