Collinson FX Market Commentary - Aug 21 - US interest rate rise is off
by Collinson FX on 22 Aug 2015
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Collinson FX Market Commentary - Aug 21 - US interest rate rise is
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Aug 21 - U.S. equities were hit with the biggest losses of the year after the dawning of reality in markets. The much promoted interest rate rise, will not happen, as the Fed hits the money printing accelerator!
The U.S. Debt is reaching levels that maintenance is now the problem. Default is a reality if the Fed raises interest rates. Market pundits are realizing that the Fed cannot raise rates and the money machine is overheating. The expansion of the money in circulation pays the bills but surely some one will wake up!?
The Dollar reflected this, with the much maligned EUR, jumping to 1.1200 and the GBP to 1.5700! Commodities remain under pressure with China flailing. The AUD is the victim, trading 0.7330, while the NZD consolidates above 0.6600. Global economic realities are hitting home and statistical manipulation fails the sniff test.
Collinson FX Market Commentary - Aug 20 - Kiwi shows unusual life signs
Aug 20 - Equity markets turned negative overnight with little in the Fed minutes to support confidence. Fed minutes revealed that a 'rate rise was nearing' and 'conditions approaching' but (and a big but) assuming inflation and labour markets were conducive.
The CPI remains insipid and labour markets headline well, but real employment, remains in the tank! Markets took the ball and ran with it. The Dollar fell against the EUR, back to 1.1100, while the GBP jumped to 1.5670. Commodity prices were mixed, with energy shares remaining challenged by demand, lead by Oil looking to test below $40. Agriculture commodities and metals managed to consolidate lending support to associated currencies.
The AUD bounced from lows to trade 0.7350, while the KIWI looks to consolidate around 0.6600, showing unusual signs of life. Central Bank activity remains the major driver of currencies and bonds.
Collinson FX Market Commentary - Aug 19 - Bulls should not gallop
Aug 19 - Equities markets gave up the previous days gains, overnight, as poor housing data confirmed weakness in the US economy. US Building Permits fell 16.3%, while Housing Starts flat-lined, hitting a major leading index. There have been no major Geo-Political issues to give direction but economic data remains constrained.
The Dollar will be the major victim if the Fed decides to defer promised interest rate rises. The EUR is now looking to test 1.1000, on the downside, while the GBP slipped to 1.5625. Commodities softened, which lead to a corresponding fall, in the associated currencies.
The AUD fell to 0.7330, looking technically vulnerable, while the NZD dropped below 0.6600. The RBA Minutes gave no reason for the bulls to gallop around the paddock, highlighting insipid growth, translating challenging local economic conditions. These are testing times and technicals are at crucial downside levels.
Collinson FX Market Commentary - Aug 18 - USD up on interest guess
Aug 18 - Equities assumed the natural move north, with an aversion to cash, due to the lack of return. The attraction of a positive reward from shares drove US markets in to the positive after diving early in response to a terrible Empire State Manufacturing Survey.
The NAHB House Market Index was the trigger to turn markets positive, while speculation of a Fed interest rate rise, drove the Dollar up. The EUR slipped back to 1.1070, while the GBP dropped below 1.5600, with little to support European markets. Oil continued to fall, drifting below $42, although consolidation in other commodity prices supported the associated currencies.
The NZD pushed back above 0.6550, while the AUD consolidated around 0.7360, attempting to build technical support levels. The RBA Minutes may reflect global economic weakness and lead to further speculation of the Feds current thoughts with regards the much spiked rate rise!
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