Collinson FX Market Commentary - Aug 1 - End of a quiet week

by Collinson FX on 1 Aug 2015 Collinson FX Market Commentary - Aug 1 - End of a quiet Click here to find out how to get CollinsonFX's free iPhone app

Aug 1 - A relatively quiet week with little in the way of life changing economic data or corporate earnings. This lead to further speculation about the Federal Reserve and their monetary policy. It appears, save any dramatic economic or GeoPolitical disaster, they will raise rates. This should drive the Dollar higher and push commodities lower. The EUR slipped below 1.1000, while the GBP hovers around 1.5600.

Commodities remain a target, as global demand withers, driving the AUD below 0.7300 while the KIWI was hammered a big figure to trade 0.6590. The coming week is huge for global economic data releases and Central Bank activity.

The Bank of England will be bullish while the RBA will remain bearish. Economic data will drive markets via Central bank activity and musings.

Collinson FX Market Commentary - July 31 - AUD hit by new build slump
July 31 - US GDP was revised back to positive from the previously shocking contraction. This adds fuel to the fire burning for the Federal Reserve to raise interest rates. The two dictated determinants for a rate rise in the US are Employment and Inflation and both are compliant. It would be hard to argue against a return to normal monetary policy unless there is an economic or GeoPolitical crises.

Equity markets were flat reflecting the lack of economic data releases and mixed corporate earnings. The Dollar remains bid, due to Central Bank prospects, with the EUR slipping to 1.0920 and the GBP holding 1.5600. Oil and Gold lead commodities lower which continues to impact commodity currencies.

The KIWI is testing 0.6600 on the downside, while the AUD slipped below 0.7300, after suffering an 8.6% contraction in Building Applications. Economic data will determine daily equity and currency moves to close the week save an abrupt Chinese stock market collapse.

July 30 - The FOMC confirmed that an interest rate rise was in the pipeline for later this year. The Fed observed the Labour market had improved to such an extent that a rate rise is probable. The Chinese stock market crash and the Greek crises had both threatened the global economy which could negatively impact the US.

The Chinese crisis is far from over, but perhaps this will not contaminate the greater economy, thus global markets. The US appears to be moving to raise rates but the Dollar did not reflect this as they left rates unchanged. The Fed have been reluctant to commit and have allowed excuses to permeate their language.

The EUR hovered around 1.1000, while the GBP traded around 1.5600. Commodity demand remains weak but the associated currencies continued to rebuild, with the AUD breaking back to 0.7300, while the NZD pushed above 0.6650. Central Banks, more particularly the Fed, control currencies and bonds which react to economic data and global economic crises. There appears to be a plethora of reasons to defer any interest rate rise!?

July 29 - Stock markets rebounded after a week of sales ruminating from Chinese panic. The said market consolidated during yesterday's trade and gave some confidence to global equities. It is far from over and there will be more complications. The Dollar rebounded against the EURO, trading 1.1050, while the GBP hit 1.5600 supported by the prospect of interest rate rises.

Commodity currencies were relieved by the reported recovery in China, with the AUD breaking back above 0.7300, while the NZD pushed above 0.6650. The markets have been grossly short commodity currencies, for a very good reason, but now are paying the price! Domestic economic data will be a major driver of markets while keen eyes train on China!

July 28 - Chinese equities fell off another cliff to begin the week sending jitters through global share markets. After another testing week across global markets the Chinese collapse has sparked fear on markets. Chinese Government intervention has made some difference, but a fall of 8.5% on the day, worries many!

Chinese contraction is impacting corporate sales, to those exposed to Chinese markets, impacting European and US earnings. The Dollar was hit overnight, with the EUR jumping to 1.1100, while the GBP moved to 1.5550. Commodity demand remains under pressure and so the associated currencies did not receive the boost from the flagging Dollar.

The AUD was tenuous, trading 0.7270, while the NZD looks to secure 0.6600. The focus appears to be on how far China will fall and how much impact the share market collapse will impact the greater economy....time will tell!?


For more on Collinson FX and market information see:
www.collinsonfx.com and www.collinsonwealthmanagement.com

Countries: | NZ: 0800 338 838 | AU: 1800 143 415 | NY: 1888 6257 833 | UK: 0800 0285 834 |

Disclaimer: The details expressed in this website and accompanying documents or transmissions are for information purposes only and are not intended as a solicitation for funds or a recommendation to trade. Collinson Forex Ltd accepts no liability whatsoever for any loss or damages suffered through any act or omission taken as a result of reading or interpreting any of the information contained or related to this site.