Collinson FX Market Commentary - Mar 22

Collinson FX Market Commentary - Mar 22 - DOW drops 200 points

by Collinson FX on 21 Mar 2017

29er - Oceanbridge NZL Sailing Regatta - Day 1 Richard Gladwell www.photosport.co.nz

Collinson FX Market Commentary - Mar 22 - GBP slips on Brexit news

Equities staged a dramatic reversal of fortune, with the DOW shedding over 200 points, casting a negative pall over markets. Investors were nervous about the prospects of the Trump administrations pro-growth policies progress through Congress. The healthcare reform was due in the House on Thursday, and this is a pre-requisite to Tax reform.

Oil prices resumed their downward moves, reflecting commodity prices, in general. This did not assist the associated currencies, with the NZD drifting to 0.7020, while the RBA impacted the AUD. The RBA minutes revealed concerns over the growing real estate bubble and weak wage growth, but it was the commentary on the US Dollar that hit the currency. The AUD fell below 0.7700, after the Bank observed the Feds 'rate rise policy', would impact negatively on the local currency.

The GBP jumped to 1.2480, supported by the certainty of a Brexit trigger data and stronger CPI numbers supporting growth. The EUR also jumped to 1.0800, as polls calmed fears that LePen would rise to the Presidency, which would threaten the single currency. Political developments in the US and Europe weigh heavily on markets, while commodity prices and economic data remain a daily influence, driving direction.

Collinson FX Market Commentary - Mar 21 - GBP slips on Brexit news

Markets opened the week quietly, in the US, with little on the economic data front to drive equities. A couple of Fed officials have been dovish in commentary, post the Fed announcement, regarding rate rises and accepting of inflation. This did little to support the Dollar, with the EUR rising to 1.0730, while the Yen held 112.50.

The GBP slipped after the UK PM, Theresa May, confirmed the trigger of Article 50 on March 29. Oil prices drifted lower and the Chicago Fed Manufacturing Activity Index remained positive. The softer reserve allowed commodity currencies to book further gains, with the AUD consolidating above 0.7700, while the NZD pushed towards 0.7050.

The USD has been restrained post the FOMC meeting, due to the dovish rhetoric, but the underlying strength should come to the click here and here Or for the latest update click here

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