Please select your home edition
Collinson and Co

Collinson FX Market Commentary- April 24, 2014 - RBNZ lifts OCR

by Collinson FX on 24 Apr 2014
Andrew Wills, Anatole Masfen and Matt Kelway, winners of the 2014 NZ Etchells National Championships © Richard Gladwell

Collinson FX market Commentary: April 24, 2014!Click_here to find out how to get CollinsonFX's free iPhone app

Newsflash: RBNZ has raised the OCR to 3%. RBNZ says the speed and scale of the rate rises will depend on data and inflation pressures. Inflation is moderate but pressure increases. RBNZ will raise rates to keep future inflation near 2%. (From Collinson's Mobile app)

The turn around rally underway over the last week and a half, has stalled with some questionable economic data across the globe, testing confidence. Equities crashed in Europe after worries over demand from China and mixed PMI data.

PMI Manufacturing, Services and Composite rose but was distorted by strong growth from Germany and soft activity in France. The EUR held 1.3800 after a steady rise was dampened by equally poor data from the US. New Home Sales plunged 14.5% and Weekly Mortgage Applications dropped 3.3% despite the record low interest rates. Housing recovery appears to have 'hit the wall' this year after a steady recovery.

The interest rate cost is an incentive so demand must be driven by weaker consumer activity.The AUD tumbled yesterday after the release of CPI inflation data. Expectations were for around 0.8% for the quarter and a big miss came in at 0.6%. This allows the RBA to continue the low interest rate environment and takes the pressure off the currency.

The currency dropped back to 0.9280 and allowed upward pressure on the KIWI to stall. The NZD dipped to 0.8580 with the RBNZ to announce the latest rate decision this morning. The hawkish Governor has probably made his point, with the last rate hike, and will resist further temptations. Look to further economic data release, to drive currencies and equities, with the absence of any break-out Geo-Political events.

Collinson FX market Commentary: April 23, 2014

Equity markets built on last week's gains which has all but eliminated the almost forgotten correction. It appears Geo-Political threats have subsided and markets are looking towards promising corporate earnings reports and activity. Economic data has been positive recently without setting the world on fire. US leading Indicators rose 0.8% and Manufacturing improved according to the Richmond Fed's report.

House Prices rose 0.6% and Existing Home Sales rose, on last month, although remained negative. The Housing sector has undergone a renaissance over the last year but recent jitters have worried many. Housing has been underpinned by the Fed's exceptionally low interest rates over an extended, extended period! The threat lies with a break out in bond yields which would act as a panic button.

It is the sheer volume of US debt saturating markets that must eventually spook investors. The EUR rose to 1.3800 and the GBP to 1.6825 with the embattled Dollar suffering badly. Australian Leading Indicators rose which assisted the AUD back to 0.9365 supported by a weakening reserve. The KIWI moved back to test 0.8600 regaining recent losses. The situation in the Ukraine remains unstable with a potential to trigger market uncertainty.

Look to US Corporate earnings and M&A activity. Economic data releases across Asia, Europe and the USA will also drive market direction in an abbreviated week.

For more on Collinson FX and market information see: and

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.

Collinson and Co

Related Articles

Collinson FX Market Commentary - Oct 21 -
. .
Posted on 19 Oct
Collinson FX Market Commentary - Oct 15 - Positive sign from US sales
AUD breaks back above 0.7600, while the NZD looks towards 0.7100 again US Retail Sales met expectations and were positive! This gave the markets some enthusiasm and lead to further speculation for the much vaunted Fed interest rate rise. This took the shine off the equity rally. The University of Michigan confidence report was decidedly negative
Posted on 17 Oct
Collinson FX Market Commentary - Oct 14 - Chinese exports crash
The NZD rallied back towards 0.7100, while the AUD floundered around 0.7560, reversing the recent cross rate moves. Chinese Trade data dominated global markets overnight, with little economic data release of import, in Europe or the USA. Chinese exports crashed 10% for the month (5.6%p.a.), while imports fell 1.9%. The dreadful trade data confirmed the weak global demand for the world factories product.
Posted on 14 Oct
Collinson FX Market Commentary - Oct 13- It's the US economy, Stupid!
The AUD has ceded 0.7600, now trading 0.7560, while the KIWI tried to build a firewall above 0.7000. Current US GDP growth is a depressing 1%, with all reviews on the downside, reflecting the parlous state of the economy. The Fed telegraphed four rate rises this year and none have eventuated so it is hard to believe the rhetoric.
Posted on 14 Oct
Collinson FX Market Commentary - Oct 12- Light week grinds idle minds
AUD dipping to 0.7540, while the NZD dipped to 0.7050 The EUR slipped to 1.1050, while the GBP tested new lows, falling to 1.2200. Commodity currencies were not immune, with the AUD dipping to 0.7540, while the NZD dipped to 0.7050. A light economic data week allows diversion and musing over Central Bank perceived actions.
Posted on 12 Oct
Collinson FX Market Commentary - Oct 11 - Oil surges on Russian deal
Recent weakness in the NZ Dollar, pushed the KIWI back to 0.7120, while the AUD held above 0.7600. Oil prices surged to $51/barrel after President Putin confirmed collusion on a global cap on production with the OPEC cartel. German Trade data continued to show resilience with both Exports and Imports showing healthy gains.
Posted on 10 Oct
Collinson FX Market Commentary - Oct 8/9 - GBP haemorrhage continues
The KIWI stabilised around 0.7150, while the AUD attempts to regain 0.7600 The EUR pushed back towards 1.1200, while the GBP continued to haemorrhage, falling to 1.2430. Sterling will stimulate trade and when the rebound commences, watch the backlash, as there will be a correction. The KIWI stabilised around 0.7150, while the AUD attempts to regain 0.7600, despite respective efforts from Central Banks.
Posted on 10 Oct
Collinson FX Market Commentary - Oct 7 - KIWI falls further
The AUD fell to 0.7575, while the KIWI has plunged to below 0.7150 Commodity currencies were not immune to the rising Dollar, with the AUD falling to 0.7575, while the KIWI has plunged to below 0.7150. All eyes remain on the NFP's and the speculation that will ensue! He's Our Rokkii in the Toorak!
Posted on 8 Oct
Collinson FX Market Commentary - Oct 6 - US Rate rise empty rhetoric
The NZD is now testing 0.7150, while the AUD holds above 0.7600, cementing one direction for the Trans-Tasman cross. Talk of a Fed rate rise is empty rhetoric on the eve of a Presidential election. The EUR held 1.1200, while the GBP trades on lows of 1.2750, despite positive UK economic data. Commodity currencies have reacted to a general campaign from the local Central Banks aided by reinforcement from the Dollar.
Posted on 6 Oct
Collinson FX Market Commentary - Oct 5 - Dr Phil says more of the same
The AUD fell to 0.7620, while the NZD looks to test 0.7200, aided by a weaker Dairy auction. The RBA left rates unchanged, under the newly appointed Governor (Dr Philip) Lowe, who embraced continuity in words and action. The AUD was steady until the rising reserve hit the currency overnight. The AUD fell to 0.7620, while the NZD looks to test 0.7200, aided by a weaker Dairy auction.
Posted on 4 Oct