by Collinson FX
Steinlager 2 returns home, May 5, 2012
Collinson FX market Commentary: 7 May 2012
Equity Markets had their worst week of 2012 as confidence plunged fueled by weakening economic data and political uncertainty surrounding the EU.
The French Election looks likely to promote the Socialist leader, Hollande, who advocates anti-austerity measures threatening the current status quo and spreading uncertainty. The EUR continued lower falling to 1.3075 and the GBP 1.6145.
In the US markets continued to retreat after slower jobs growth in the all important Non-Farm Payrolls number. The actual employment rate dropped to 8.1% but participation continued to plummet threatening any danger of a robust economic recovery.
Commodity currencies suffered as demand fell and economic conditions deteriorated in Australia and NZ.
The AUD slipped lower to 1.0175 and could test parity short-term. The KIWI was hit hard after falling below the major 0.8000 mark has slipped lower to 0.7950.
Risk appetite has disappeared and poor employment data globally reflects the tenuous recovery. Markets will focus on the EU and in particular the French elections and the percieved consequences. Downside looks likely after a week to forget!
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