Collinson FX Market Commentary - Sep 8 - US interest rate rise delay

by Collinson FX on 8 Sep 2017 Collinson FX Market Commentary - Sep 8 - US interest rate rise delay

The ECB President signalled an end to QE, as he cited stronger economic conditions, but warned against the impact on trade of a rising EURO. The single currency reacted accordingly, spiking to 1.2000, supported by strong GDP data (2.3%).

Recent softer economic conditions in the US, has led to speculation the Fed will delay any interest rate rises, undermining the Dollar. The GBP jumped to 1.3080, while the Yen traded 108.50, reflecting weakness in the reserve. Commodity currencies were also beneficiaries of the weaker Dollar, with the AUD pushing 0.8025, while the NZD looks to regain 0.7200.

Geo-Political issues, in the form of North Korea, will continue to promote market safety moves. A massive hurricane (Irma) threatens Florida and may divert US market focus, while local markets will look at Japanese GDP growth and trade data.

Collinson FX Market Commentary - Sep 7 - Trump deal breaks ground

Equity markets regained some lost ground, on the news the Trump administration had done a deal with Congressional Democrats, over Hurricane Harvey relief and the Debt Ceiling. The breakthrough of bi-partisanship in Washington is a step forward and a signal legislation may be forthcoming.

The Fed released their 'Biege Book' today, citing moderate expansion in the US economy, although observed a softening in employment growth. There is little pressure to raise rates and so the US Dollar drifted. The EUR hit 1.1900, while the GBP consolidated above 1.3000, reflecting USD weakness rather an inherent strength of currencies.

The NZD slipped back below 0.7200, while the AUD broke 0.8000, supported by local GDP growth data. Markets will look closely at ECB action tonight, especially after the Bank of Canada raised rates, surprising many.

Collinson FX Market Commentary - Sep 5 - KIWI falls as Labour looms

A quiet start to the week due to the long Labour Day weekend in the USA. Markets digested the softer economic data releases, headlined by the Non-Farm Payrolls, which disappointed. The lack of strong economic data, in the US, lead to speculation that any rate rise from the Fed may be punted. This allowed the recovery in the equity markets to continue while the Dollar rebound was abruptly halted.

The EUR lifted to 1.1850, while the yen moved to 109.60, enhanced by the safety play with the NOKO threat. Commodity currencies held their ground, with the NZD trading 0.7150, while the AUD drifted below 0.7950. The Australian market will be focused on the RBA decision and the associated commentary regarding the state of the local economy. Expectations are for no surprises but semantics are important.

The NZ Dairy auction will likely influence local markets although they remain pre-occupied with the election. The big surprise has been the rise of the Labour party and their rise in the polls has been mirrored by the fall in the currency.

Collinson FX Market Commentary - Sep 3 - Kiwi under extreme pressure

Non Farm Payrolls missed expectations, 156,000 v expected 180,000, as Unemployment crept up to 4.4%. This was a disappointing number and has followed some softer economic data coming during the past week.

The University of Michigan Confidence also showed some slippage, relieving pressure on the Fed to raise rates, while the Dow regained 22,000. The softer data also lead to a release of pressure on interest rates and the Dollar. The GBP rose to 1.2950, while the EUR traded 1.1850, with flat EU PMI data releases.

The AUD held 0.7950, supported by strong commodity prices, while the NZD traded 0.7150. The NZD has been under extreme pressure, of late, as polls indicate the left wing Labour party may regain office.

The coming week is swimming in an ocean of economic data releases and Central Bank rate decisions. Central Bank commentary, accompanying the decisions, will drive local markets and the RBA will kick off on Tuesday!

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