Collinson FX Market Commentary- June 18, 2012 - AUD blows past Parity

Image of the Day As Dennis Cooper said they had kite problems on Amante today - Audi Winter Series 2012

Collinson FX market Commentary: June 18, 2012

Markets rallied strongly to close the week but for all the wrong reasons. Equities and Commodities all had strong gains but not through market confidence or growing global demand but from expectations of Central Bank intervention.

The AUD blew through parity to trade well above 1 and the KIWI booked gains to trade 0.7870. The crescendo is nigh with storm clouds gathering across the EU and contagion spreading to global markets.

The G20 meet this week and talk of a co-ordinated central bank intervention pumping the banks with yet further liquidity. This will work but is completely destroying the real value of money. We have seen US wealth dissappear over the last years and the Fed is to blame.

The Central Banks across the Globe have held off to monitor the Greek elections and stand ready for massive reaction should the Greeks undermine the EU. The only answer now is the monetary action which only enriches Banks and encourages bloated and inefficient financial institutions.

The greatest fear is the 'run on Banks' which has commenced in Greece and Spain. The EU is said to make an important announcement regarding more long term solutions which must include greater fiscal and political union to match the single currency. Secondary to this will be economic data which has been in serious decline of late.

US Housing will be important but expectations are not high.

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