Collinson FX Market Commentary - Feb 11 - Kiwi flounders as AUS surges

by Collinson FX on 11 Feb 2017 Collinson FX Market Commentary - Feb 11 - Kiwi flounders as AUS surges

Feb 11-12 - The trump rally continued into record territory for the equity markets. This was triggered by the announcement of the 'phenomenal tax plan' anon. The markets are rallying strongly, telling a contradictory story to the US media, with every post a winner.

To further boost the markets markets are embracing the proposed bilateral trade agreements. The Japanese PM is in the US to embrace the new administrations trade polices and the reassertion of the 'One China' policy has enhanced the trade proposals. The EUR drifted back to 1.0650, while the Yen moved to 113.50, reflecting the rising bond yields.

The blow dealt by the RBNZ has been sustained, with the currency floundering below 0.7200, while the AUD marches towards 0.7700. This has provoked a sudden and substantial reversal in the cross rate. The coming week sees an avalanche of global economic data releases although it is hard to see Trump not dominating markets.

Collinson FX Market Commentary - Feb 10 - NZD collapses on RBNZ stall

Feb 10 - Trump reignited markets overnight! Trump met with airlines and promised a 'phenomenal tax announcement' in a few weeks. The power of the bully pulpit is front and centre in the US and Trump takes full advantage. Equities, currencies and bond yields all jumped on the Trump news. The EUR slipped back to 1.0650, while the Yen jumped to above 113.00, in reaction to a rising reserve.

The RBNZ left rates unchanged, in their latest Monetary statement, shifting the bias from easing to neutral. Many expected a more bullish approach to interest rates, but the Central Bank predicted no action until 2019. This did not gel with reality. The RBNZ have moved rates with little encouragement, in both directions, often incorrectly and certainly untimely. This reading of the monetary situation triggered a collapse in the NZD, which fell from above 0.7300, to trade 0.7175!

The RBA has been far more bullish and the AUD remained steady, trading around 0.7625, allowing a big adjustment in the cross rate. Central Bank action and Trump remain the major drivers across markets.

Collinson FX Market Commentary - Feb 9 - Thankfully all quiet on US front

Feb 9 - A quiet night of trade on equity and currency markets with little economic data releases or action on the Trump front. Trump is still immersed in the immigration ban and pushing for his Cabinet approvals in the Senate. You can't keep a good man down for long so we can expect more fireworks to impact markets.

The Dollar was steady, with the EUR trading below 1.0700, while the Yen holds around 112.00. Japanese Current Account and Trade data was static, having little impact on associated currencies. The RBA left rates unchanged and expectations are similar for the RBNZ in election year.

RBNZ Governor Wheeler, is likely to take the opportunity to jawbone the currency lower, with little effect. The Fed's actions to tighten monetary policy will close interest rate differentials and perceived risk will drive rates up in NZ and Australia.

Collinson FX Market Commentary - Feb 8 - No rates move from RBA

Feb 8 - Equities regained lost ground overnight, while the Dollar recovered more ground, with US markets looking closely at corporate earnings. The US trade deficit rose to another record high, which highlights one of the Trump administrations favourite issues, poor trade agreements allowing massive trade imbalances.

The EUR slipped below 1.0700, while the yen has nudged below 112.00, with Central Bank action and speculation again coming into play. The RBA left rates unchanged, as expected, leaving the interest rate differential the potential to close on Fed rate rises.

The AUD drifted lower to 0.7625, while the NZD consolidated above 0.7300, boosted by a strong inflation report. The NZ Dairy auction also booked marginal gains, allowing the currency some license, on the upside.

Collinson FX Market Commentary - Feb 7 - AUD depressed ahead of RBA

Equity markets were softer to open the week, with growing conflict in political circles in Europe, while Trump continues to throw the cat in with the pigeons! Nationalist French leader, LePen, launched her campaign with flourishing anti-EU and migrant rhetoric.

This sentiment is reflected also in poll for leading right winger Geert Wilders, in Holland. The threats to the single market are on the rise. German Factory orders surged 5.2%, emphasising the trade advantage German enjoys through currency manipulation, as outlined by Trump adviser Navarro. The EUR slipped back to 1.0740, while the GBP fell to 1.2450, as the British House Speaker publicly refused Trump permission to address Parliament.

The AUD traded around 0.7650, depressed after weak Retail numbers, ahead of the RBA rate decision. The Central Bank has left rates unchanged for months and no action is expected. The NZD tests 0.7300 and is likely to trade on reserve strength with some local Central Bank speculation to drive daily moves.

For more on Collinson FX and market click here and here Or for the latest update click here

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