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Collinson FX Market Commentary- May 5 - RBA drops rate as predicted

by Collinson FX on 5 May 2015
Team Alvimedica - Volvo Ocean Race - In Port Race, Auckland Richard Gladwell www.photosport.co.nz
Collinson FX market Commentary: May 5, 2015 - Click here to find out how to get CollinsonFX's free iPhone app

May 5 - Chinese Manufacturing PMI continued to contract, falling to 48.9%, confirming weaker demand for commodities. This has a direct impact on demand hitting the associated currencies.

The NZD dallies around 0.7520, while the AUD slipped to 0.7830, assisted by a stronger reserve. Australian Job Ads improved and Building Permits expanded by 2.8%, some good news from an economy under recent fire, while NZ Commodity Prices fell 7.4%.

European equities booked gains, boosted by stronger Manufacturing data, in direct contrast to China. This supports improving confidence in European markets post-QE. US equity markets banked some gains and are looking forward to the all important Non-Farm Payrolls on Friday, while previews from the ADP and Challenger Jobs reports, should give insight.

The Dollar continued to recover, moving to EUR 1.1140, while the GBP slipped to 1.5110. The RBA is expected to cut interest rates, to at least 2%, while confirming a weaker economy and advocating for a lower currency.

Later today the RBA confirmed a rate drop to 2% and the AUD fell half a cent.

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