Collinson FX Market Commentary- Mar 11 - Kiwi plunges

by Collinson FX on 11 Mar 2015 Collinson FX market Commentary: March 10, 2015

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Mar 11 - Equities were hammered overnight amidst speculation of a Fed rate rise. Recent economic data has been positive enough to adopt a reality in monetary policy.

This has lead to many believing that a rate rise is in the offing. This directly impacted currencies, with the Dollar rallying strongly, although dovish Fed Chair perhaps questions this. The EUR collapsed to 1.0700, while the GBP fell below 1.5100. The rally in the USD, hit commodities, as the reserve and thus the associated currencies.

The AUD dropped to 0.7600, while the KIWI plunged to 0.7250, humouring a much maligned RBNZ. The economic news has been positive, but hardly strong, thus excusing any pressure on the Federal reserve. The NZD currently trades 0.6770 and 0.4810 against the EUR and GBP. The NZDJPY cross has dropped below 88.00 on the back of a week NZD.

Collinson FX market Commentary: March 10, 2015
Mar 10 - The markets opened the week steady after positive but contracting trade data from China, Japan and Germany. Chinese trade dipped, due to a massive fall in Exports (48%) and Imports (20.5%), reflecting the reduction in overall trade. This was confirmed in numbers released in Japan and Germany.

Trade indicates that demand may be compressing which does not bode well for demand or corroborate the recovery story. The EUR traded 1.0850, while the GBP rallied to 1.5120, which is in a slightly better space than the single currency. US markets were quiet, with inflated valuations(as measured by earnings) posing a risk to record equity levels.

The AUD regained 0.7700, while the KIWI traded above 0.7350, supported by healthy interest rate differentials. The RBNZ is said to be considering Capital/Income ratios to regulate housing lending, in an effort to combat the booming property markets, while cutting interest rates. The NZD currently trades 0.6770 and 0.4850 against the EUR and GBP, little changed overnight.

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