Collinson FX Market Commentary - Mar 11-12 - KIWI recovers above 69c

by Collinson FX on 12 Mar 2017 Collinson FX Market Commentary - Mar 11-12 - KIWI recovers above 69c

Non Farm Payrolls came in higher than expected, although telegraphed, providing the trigger for rises in equities. Strong employment data has confirmed the expected rate rises from the Fed, coming this Wednesday, with the accompanying rhetoric providing direction.

The Dollar has been on a bull run, which is likely continue, when the Fed embarks on a rate rise program for 2017. The Dollar settled to close the week, with the EUR jumping to 1.0690, supported by stronger than expected German trade data.

Commodity currencies regained some ground, with the AUD back to 0.7550, while the KIWI jumped back above 0.6900.

US CPI and Retail Sales will provide insight into growth and confidence, in the US economy, but all eyes will be on the FOMC meeting.

Collinson FX Market Commentary - Mar 10 - KIWI falls through 69c

The ECB left rates unchanged and Draghi observed the recovery was gaining momentum although inflation remained benign. Lack of inflation in the modern European economy, is not a sign of health and reflects the lack of growth, confirmed by Draghi's willingness to add further QE.

The EUR managed to stabilise, post-ECB decision, moving up to 1.0580. US markets keenly await the Non Farm Payroll number tonight, with expectations high after the stellar ADP number. Employment data will drive markets into the close for the week, with the Dollar living at high levels, backed by high expectations for Fed rate rises.

The KIWI has slipped below 0.6900, while the AUD is drifting towards 0.7500, as the correction in the cross-rate continues

Collinson FX Market Commentary - Mar 9 - KIWI falls further

Chinese Trade data deteriorated, with a contraction in Exports, while Imports spiked. The reversal in the trade position comes at a convenient time, with trade imbalance becoming a huge issue, but does surprise many pundits. The other big economic data release overnight was the ADP employment report from the States.

The ADP added 298,000 private sector jobs, a massive surge from the expected 185,000, adding further pressure to the US yield curve. This has supported the bull run the Dollar has been enjoying, with the GBP falling to 1.2150, while the Yen traded 114.50. Commodity currencies were inflated prior to recent rallies in the USD, thus the impact on the KIWI has been substantial, falling to calendar year lows.

The NZD is now testing 0.6900, on the downside, while the AUD has been less vulnerable. Rising commodity prices has provided cover for the AUD, although the driving reserve finally prevailed, with the AUD falling back to 0.7525. Look at the ECB rate decision and further US employment data to drive the currencies.

Collinson FX Market Commentary - Mar 8 - AUD waltzes away from KIWI

US Markets were quiet, with no major economic data releases, while digesting the new Republican Healthcare bill. EU GDP was flat, while Factory Orders plunged, giving little impetus to the maligned currency.

The EUR traded by 1.0550, while the Yen jumped to 114.00, ahead of a slew of local economic data releases. The NZ Dairy Auction was quiet and the KIWI consolidated below 0.7000, while the AUD jumped back above 0.7600.

The RBA left rates unchanged, as expected, giving some heart to the currency despite a rising reserve. Look out for Chinese and Japanese economic data releases to drive local markets.

Collinson FX Market Commentary - Mar 7 - KIWI sinks below 'Big' figure

US Factory Orders and Durable Goods Orders both posted gains, ahead of a likely rate rise from the Fed next week, which has supported the stronger Dollar. The Yen trades around 115.00, while the GBP has slipped back to 1.2230, impacted by the reserve.

The KIWI has been under pressure, of late, slipping below the 'Big' figure of 0.7000. The AUD has held up well, despite the rising Dollar, trading 0.7570, supported by stronger Retail Sales.

The cross rate has been severely impacted, with a major correction underway, awaiting the RBA decision. Rates are likely to remain on hold but rhetoric will be click here and here Or for the latest update click here

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