Collinson FX Market Commentary - Mar 15

Collinson FX Market Commentary - Mar 15 - Oil prices drop

by Collinson FX on 14 Mar 2017

49er - Oceanbridge NZL Sailing Regatta - Day 1 Richard Gladwell www.photosport.co.nz

Collinson FX Market Commentary - Mar 15 - Oil prices drop

Mar 15 - Oil Prices hit the headlines overnight, falling to $47.70, hitting energy companies and dragging equities lower. The lower prices are a direct result of oversupply, with global stocks rising, as production does not inhibit. Equities were not assisted with the prospect of rising interest rates, as the FOMC sat down for their two day meeting, with high expectations.

The rate rise will come and the frequency and amount of further rises will determine the ferocity of the Dollars bull run. This has continued to strengthen the Dollar, with the EUR slipping to 1.0600, while the GBP retreated to 1.2150. The EUR was not assisted by very weak ZEW reports from Germany and the EU, while the German CPI was flat and EU Industrial Production contracted.

Markets now await the Feds announcement tonight, with the commentary becoming hugely important, to determine reserve strength. The AUD held above 0.7550, while the NZD consolidated above 0.6900, keenly awaiting the determinations on US Monetary Policy. A simple rate rise may be treated as 'Sell the rumour, buy the fact' but the Fed's rhetoric will determine enthusiasm for the Dollar.

Collinson FX Market Commentary - Mar 14 - Big week ahead

Markets were steady on what could develop into a huge week for currencies. This coming week the UK look to trigger article 50, the 'Brexit' clause, which will impact the GBP. The Dutch go to the elections and a strong showing of the anti-EU parties could adversely impact the EUR, both short term and fundamentally.

The other event impacting markets is the two day meeting of FOMC, which is likely to embark on a rate rise program, adding to yields and boosting the Dollar! Markets will be nervous with anticipation, which has the potential to drive big moves, although all outcomes are predictable.

The EUR drifted back to 1.0650, while the GBP gathered momentum, trading up to 1.2250. Commodity currencies are completely open to reserve trading, with the AUD back below 0.7600, while the NZD has regained 0.6900. Rising yields should deliver a stronger Dollar although the GBP has potential to surprise while much of these moves are click here and here Or for the latest update click here

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