Collinson FX Market Commentary - May 4

Collinson FX Market Commentary - May 4 - Surprise from RBA

by Collinson FX on 4 May 2016

Smeg (AUS) - Day 4 - ANZAC 18fters - April 2016 Richard Gladwell www.photosport.co.nz

Collinson FX Market Commentary - May 4 - Surprise from Click here to find out how to get Collinson FX's free iPhone app

May 4 - The big news in local markets was the RBA decision, followed by the pre-election Budget. The RBA caught the markets by surprise, cutting the rate by 0.25%, to 1.75%. This was not unexpected, but with the Bank of Japan and RBNZ, resisting the urge to act was anticipated.

The AUD was slammed hard, falling from 0.7700, to trade below 0.7500! The Australian economy, has been travelling relatively well, but last weeks inflation number forced action. Inflation came in well below expectations, 1.4% from 1.9%, allowing plenty of room for cuts. The inflation number, more importantly, telegraphed weaker growth triggering monetary action.

On the fiscal side, the budget was predictably safe considering the upcoming election, failing to take any substantial action to combat the bloated deficit and debt. The big moves in the AUD, dragged the Trans-Tasman cousin lower, after rallying to highs above 0.7000.

The currency tests 0.6900 on the downside despite steady Dairy prices. Markets now await the local employment data. Equities were weaker globally, while the GBP dropped to 1.4550, after weak Manufacturing PMI data. Central Bank activity and commentary remains the major influence on global monetary policy and currencies. Fiscal ineptitude has forced Central Bank largesse and economic data reflects this.

Peroni (AUS) - Race 2 - Day 4 - ANZAC 18fters - April 2016 © Richard Gladwell www.photosport.co.nz

Collinson FX Market Commentary - May 3 - Kiwi gets good support
May 3 - Equities rallied to open May, contradicting the age old adage, 'Sell in May, go away!'. ISM Manufacturing data in the US was softer, following the Chinese lead, in line with expectations. The Dollar did not find any support, with the EUR hitting 1.1500, while the JPY traded 106.50!

Commodity currencies also found some heart, reflecting the weakness in the reserve, with the NZD testing 0.7000. The KIWI has found substantial support, since the RBNZ decided to resist the temptation to cut rates! The RBA has its turn and resist it may!?

There is a possibility that the RBA will leave rates unchanged, but after the examples of the Bank of Japan and the RBNZ, they may take the plunge?! Time will tell!

For more on Collinson FX and market information click heer and 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

If you want to link to this article then please use this URL: www.sail-world.com/144281

Related Articles

Collinson FX: Apr 11: US interest rates to drop
The RBNZ left rates unchanged in NZ, but talked a big game, about holding rates higher The RBNZ left rates unchanged in NZ, but talked a big game, about holding rates higher and squeezing out inflation. This has the desired impact on the NZD, which initially pushed upwards, but the news from the US on inflation, destroyed that narrative.
Posted on 11 Apr Collinson FX are at the Hutchwilco Boat Show
Collinson Forex, a prominent financial services company, is at the Hutchwilco NZ Boat Show Collinson Forex, a prominent financial services company, is making a notable presence at the NZ Boat Show in Auckland from the 18th-21st of May, demonstrating their commitment to the industry.
Posted on 19 May 2023 Collinson FX: Jan 20: No change with PM's exit
The NZ ‘PM of Aotearoa' resigned yesterday, which had little impact on the currency. The NZ ‘PM of Aotearoa' resigned yesterday, which had little impact on the currency, as this will have little impact on the NZ economy.
Posted on 19 Jan 2023 Collinson FX: Dec 5 - Risk appetite rallies
US Federal Reserve Chairman confirms the rate of future interest rate rises may slow US Federal Reserve Chairman confirms the rate of future interest rate rises may slow, as early as December.
Posted on 5 Dec 2022 Collinson FX: Sept 30 - A finger in the dyke
Inflation remains the big problem haunting Central banks across the Western world The Bank of England in an effort to combat the reckless unfunded UK Government's fiscal spendathon mini-budget, kept bond yields lower but is a finger in the dyke. AUD crashed back to 0.6450, while the NZD plunged to 0.5650
Posted on 29 Sep 2022 Collinson FX: June 15 - 'Bear' territory
Markets are crashing across the Western world, with equities charging into ‘bear market' territory Markets are crashing across the Western world, with equities charging into ‘bear market' territory, while crypto's collapse.
Posted on 14 Jun 2022 Collinson FX: June 14: Equity markets routed
The rout on equity markets continued overnight, to open the new trading week and spread The rout on equity markets continued overnight, to open the new trading week and spread to bond and currency markets
Posted on 13 Jun 2022