Collinson FX Market Commentary - June 3 - Aussie RB sits on fence
by Collinson FX on 3 Jun 2015
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Collinson FX Market Commentary - June 3 - Aussie RB sits on Click here to find out how to get CollinsonFX's free iPhone app
June 3 - The Dollar was hit hard overnight as the reserve plunged pushing up currencies and commodity prices. The EU finally displayed some signs of life, with a rise in CPI inflation data, reflecting the impact of ECB Monetary Policy. Many pundits were focused on Greek debt negotiations in Berlin, which must come to a conclusion, with a hard deadline Friday.
The Greeks have submitted a 'final plan' but IMF/EU negotiators insist on economic conditions being met!? The slide in the Dollar was reflected in the EUR, which jumped to 1.1180, while the GBP hit 1.5350. Oil led the commodities higher, which boosted the associated currencies, accentuated by the fall in the USD. The NZD jumped to 0.7175, while the AUD spiked towards 0.7800!
The RBA left interest rates unchanged (2%) and the focus was on the commentary. The Bank observed that the global economy was growing 'modestly' (code for flat) while Central Banks continued accommodative monetary policy to support borrowing and spending. The RBA noted weakness in the AUD and talked of more to come due to a massive collapse in the all-important commodity prices. They left rates unchanged, but committed to record low interest rates, to support the challenging economy.
Global markets are anaemic, supported by historically low interest rates and massive liquidity, but still inflation and growth remain weak. Look to economic data to drive markets, culminating in US jobs data, by the end of the week. The Greek crises, has potential to upset markets, along with Geo-Political developments in the Ukraine and the Middle East.
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