Collinson FX Market Commentary: July 30, 2013 - US Dollar gains

- 2013 420 Nationals, Takapuna

Collinson FX market Commentary: July 30, 2013

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Markets opened the new week with a hang-over from recent equity gains. US Markets were disappointed when the Pending Homes Sales contracted by 0.4% sending mixed signals in an industry considered a leading indicator. This week is all about Central Banks with the FOMC meeting tomorrow and ECB and Bank of England later in the week.

The other major driver for markets will be the Employment reports culminating with Non-Farm Payrolls. Tapering is expected to start in September and there has been plenty of warning so whether this impacts, we will have to see.

The Dollar was steady with the EUR 1.3250 and the GBP 1.5350. Commodities were mixed and expectations of Dollar gains have pushed the AUD back below 0.9200 and the KIWI barely holding 0.8000.rrencies and commodities will be driven by Central Bank action, commentary and market perceptions. It will be a huge week and expectations are for volatility


Collinson FX market Commentary: July 29, 2013

Markets remained flat with debate raging over whether the Fed will commence tapering of QE Infinity. Consumer Confidence surged to 85.1 from 83.9, reflecting a growing confidence in the banal economic recovery which could signal the 'beginning of the end' of Monetary Expansionism.

The week ahead holds prospects of huge moves in Currencies and Equities with Central Banks from the US and Europe taking center stage. The direction of Monetary policy is the major driver of market direction. If the Fed indicates a propensity to instigate a taming of QE then we may see the start of a long term rise in the US Dollar. It would probably impact equities negatively with the reduction in the avalanche of money.

The EUR has reached 1.3275 and the GBP 1.5390 with the diluted Dollar but this may change. Growth numbers and Jobs Reports in the US will also impact market direction.

The KIWI continues to surge, looking to test the 0.8100 level, but will come under considerable pressure if the USD worm turns. The AUD has also benefited a resurgence after recent tests of the important 0.9000 levels. The AUD settled to close around 0.9250 and will look to the new week for short term directional drivers.

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