Collinson FX Market Commentary - Sept 9 - Europeans create surprise

by Collinson FX on 10 Sep 2016 Collinson FX Market Commentary - Sept 9 - Europeans create surprise

Sep 9 - The European Central Bank surprised markets overnight by leaving interest rates unchanged and resisting the temptation to further expand Quantitative Easing. This pushed equities lower and supported the EUR as the USD rallied across the board. The EUR traded 1.1250, while the GBP slipped back to 1.3300, halting the recent rally.

Equities were soft in the US as the global impact spread. Oil prices surged to $47.50, with recent storms in the US and new attempts to control supply by Oil producers, led by Russia.

Chinese trade data was steady, while exports contracted 2.8%, imports rose 1.5%. It was the rising reserve that hit the KIWI, pushing it back to 0.7375, while the AUD fell to 0.7635. Central Bank activity continues to dominate market moves.

Collinson FX Market Commentary - Sept 8 - Equity markets drift

Sept 8 - Equity markets drifted on a low information day. The Feds Beige Book confirmed weak wage growth and benign economic conditions, which confirms the economic mantra, with slow growth and no inflation. Central Bankers are confounded by the economic conditions after the most expansive monetary policy in history. Liquidity has been massive and growth, measured by inflation, has not reacted.

The consequence is record low interest rates and not consequential growth. Failure of monetary policy has surprised academics and traditional economic theory but has not considered the fiscal side of the equation? The Dollar was drifting, with the EUR moving to 1.1240, while the GBP traded 1.3340.

Commodities remain bid, as the associated currencies pushed north, with little to support the reserve. The AUD traded 0.7440, while the NZD continued to rally, breaking through 0.7400! Confusing times for currency analysts!

Collinson FX Market Commentary - Sept 7 - AUS Cash rate remains unchanged
Sept 7 - Fallout from the Non Farm Payrolls continued and was further impacted by the Non Manufacturing data. ISM Non Manufacturing data slid from 54.9 to 51.4, worrying analysts, and pushing the Dollar lower. The EUR jumped to 1.1250, while the GBP continued the recovery, moving up to 1.3420!

Commodities continued to benefit the weaker reserve and the currencies reacted accordingly. The NZD bounded above 0.7400, while the AUD moved up to 0.7670, post RBA.

The Australian Reserve Bank left rates unchanged, pausing recent cuts, as the retiring Governor hands over the reins. A successful Central Banker and NZ should look to postpone his retirement!

Collinson FX Market Commentary - Sept 6 - OZ KIWI parity closes to 3c
Sept 6 - The employment report from the US, Friday, missed expectations allowing a surge in risk appetite. The pressure was immediately relieved on the Feds monetary policy. The Dollar drifted and commodities and equities managed to push gains.

The NZD is once again testing 0.7300, supported by a 3.2% rise in NZ Commodities, while the AUD is now pushing up to 0.7600. EU Services and Composite PMI data was weaker, while Retail Sales booked some gains, but not enough to brighten the horizon.

US Markets had the long Labour Weekend holiday so markets were quiet. Look to Central bank speculation and activity to drive markets, in the coming week, influenced by economic data.

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