Please select your home edition
Edition
Collinson and Co

Collinson FX Market Commentary- August 2, 2013 - ANZAC's dragged down

by Collinson FX on 2 Aug 2013
Close racing amongst the top crews - 2013 420 Nationals, Takapuna © Richard Gladwell www.photosport.co.nz

Collinson FX market Commentary: August 2, 2013

http://itunes.apple.com/app/collinsonfx/id533360650?mt=8!Click_here to find out how to get CollinsonFX's free iPhone app

Central Banks continue to drive markets with the ECB President Draghi leaving stimulus in place and committed to extended period of low interest rates. He also noted that the EC was through the worst of it and had turned the corner. The EUR held steady, trading 1.3215 and the GBP 1.5130 after Central Bank expansionary monetary policies were balanced out by the Fed. Bernanke has committed to continuance of QE Infinity undermining talk of tapering in the near future.

Economic indicators remain positive with the ISM Manufacturing Index rising to 55.4 from 50.9. Weekly Jobless Claims fell and Non-Farm Payrolls are expected to add up to 200,000 Jobs pushing the Unemployment rate lower. The AUD has remained vulnerable trading 0.8940 after RBA Governor Stevens comments regarding the state of the economy and the fiscal ineptitude of the chaotic Labour Government.

The KIWI also has been dragged lower, trading around 0.7880, after all the upheaval across the Tasman and Global demand under a question mark. Equities continue to be funded by Central Banks so the bubble continues to expand. Monetary largesse will have massive consequences sooner rather than later!


Collinson FX market Commentary: August 1, 2013

The Fed left the QE Infinity unchanged and the positive news on the economic front reinvigorated the 'tapering' prospects. Low inflation and GDP growth improving, has now insured that Bernanke will commence tapering. The tapering is only a cut to increasing the balance sheet well beyond any expectations and thus will have little impact.

It is the mind-set that is being reinforced. The Employment data continues to improve and the Dollar looks to a recovery. The EUR held 1.3295 and the GBP 1.5200. US GDP improved to 1.7% and employment improvement lend to the end of QE infinity thus undermining equities and boosting the Dollar.

The AUD slipped below the important floor of 0.9000 and the KIWI broke big, big 0.8000. This is new territory and does not lend to much positivity. The good news is that we may be in for the first female head of the Fed! Things can only improve!


Collinson FX market Commentary: July 31, 2013

Markets were treading water in anticipation of the FOMC meeting scheduled for a decision tomorrow. This should be a big day, with the all-important Fed meeting and crucial GDP data and the ADP Jobs Report. These three events, individually have the ability to move the market, so any uniformity of results could result in a big move.

The Fed is expected to begin to taper QE infinity by September so confirmation of this may have already been built in. Flagging GDP and falling Job prospects could signal a reversal of this tapering prospect but weakness and commitment to easing would bring negative impact to equities, commodities and currencies (except for the USD)! The USD was creeping north in the lead up to the eagerly awaited announcement with the EUR 1.3250 and the GBP 1.5240.

The AUD took a bath yesterday, falling from 0.9200 to 0.9160 after Building Permits collapsed by 6.2% for the month and 13% annually! The economic news and the plunge in mining investment sparked dovish comments from the RBA Governor Stevens. The flagging economy may attract a rate cut at the next Central Bank meeting which undermined the Ozzie!

The KIWI lost some shine, after being tarred by the same brush, dropping below 0.8000 but blowing through 0.8800 in the cross v it's troubled trans-Tasman cousin.

All eyes on the Fed and GDP with ECB and BofE still to come this week! Non-Farm Payroll will ice the cake Friday!


Collinson FX market Commentary: July 30, 2013

Markets opened the new week with a hang-over from recent equity gains. US Markets were disappointed when the Pending Homes Sales contracted by 0.4% sending mixed signals in an industry considered a leading indicator. This week is all about Central Banks with the FOMC meeting tomorrow and ECB and Bank of England later in the week.

The other major driver for markets will be the Employment reports culminating with Non-Farm Payrolls. Tapering is expected to start in September and there has been plenty of warning so whether this impacts, we will have to see.

The Dollar was steady with the EUR 1.3250 and the GBP 1.5350. Commodities were mixed and expectations of Dollar gains have pushed the AUD back below 0.9200 and the KIWI barely holding 0.8000.rrencies and commodities will be driven by Central Bank action, commentary and market perceptions. It will be a huge week and expectations are for volatility


Collinson FX market Commentary: July 29, 2013

Markets remained flat with debate raging over whether the Fed will commence tapering of QE Infinity. Consumer Confidence surged to 85.1 from 83.9, reflecting a growing confidence in the banal economic recovery which could signal the 'beginning of the end' of Monetary Expansionism.

The week ahead holds prospects of huge moves in Currencies and Equities with Central Banks from the US and Europe taking center stage. The direction of Monetary policy is the major driver of market direction. If the Fed indicates a propensity to instigate a taming of QE then we may see the start of a long term rise in the US Dollar. It would probably impact equities negatively with the reduction in the avalanche of money.

The EUR has reached 1.3275 and the GBP 1.5390 with the diluted Dollar but this may change. Growth numbers and Jobs Reports in the US will also impact market direction.

The KIWI continues to surge, looking to test the 0.8100 level, but will come under considerable pressure if the USD worm turns. The AUD has also benefited a resurgence after recent tests of the important 0.9000 levels. The AUD settled to close around 0.9250 and will look to the new week for short term directional drivers.

For more on Collinson FX and market information see:
www.collinsonfx.com and www.collinsonwealthmanagement.com

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 - Aug 16 - NZD rallies in expectation
The NZD has rallied back to 0.7200, with anticipated rises in the Dairy Auction result The JPY was steady, trading 101.20, while the GBP slipped back to 1.2875. The NZD has rallied back to 0.7200, with anticipated rises in the Dairy Auction result, while the AUD holds around 0.7670. Look for Central Bank commentary to drive market direction as weak economic data is the new norm.
Posted on 16 Aug
Collinson FX Market Commentary - Aug 12 - NZD slides
Equity markets fell from record highs to close the week after weaker than expected US Retail Sales. The NZD slipped back below 0.7200, while the AUD fell to 0.7650, both still supported by favourable interest rate differentials. The week ahead has plenty of ammunition on the economic data front, lead by CPI data, that will probably confirm weak global growth.
Posted on 13 Aug
Collinson FX Market Commentary - Aug 11 - RBNZ caught out again
The NZD trade around 0.7200, while the AUD tests 0.7700, again. The RBNZ was shocked after the dust settled. They cut rates, as expected, then verballed the currency lower.The markets saw the interest rate differential and acted.
Posted on 12 Aug
Collinson FX Market Commentary - Aug 10 - NZD does a weird rally
he AUD breaching 0.7700, while the NZD moves towards 0.7200. The NZD is rallying ahead of the RBNZ interest rate decision which confounds many as a cut in interest rates is expected. The rate is expected to be cut by to 2%, but this may be too little, too late. The RBA cut rates and the currency has rebounded strongly as interest differentials still prove attractive.
Posted on 11 Aug
Collinson FX Market Commentary - Aug 9 - RBNZ to get the stick out?
Commodity currencies held on to ground, with the KIWI moving back towards 0.7150, while the AUD consolidated around 0.76 Commodity currencies held on to ground, with the KIWI moving back towards 0.7150, while the AUD consolidated around 0.7650. NZ Markets await some expected aggressive action from the RBNZ, while a quiet week will be keenly awaiting the US Retail Sales data.
Posted on 10 Aug
Collinson FX Market Commentary - Aug 8 - Kiwi market chatter over RBNZ
The NZD is supported by interest rate differentials and holds 0.7100, while the AUD trades around 0.7650. NZ Markets are discussing the RBNZ rate decision, which is likely to cut rates, in line with other Central Banks. They would need to do this and indicate further rates to closely follow, to have a serious impact on the currency, as discovered by the RBA!
Posted on 9 Aug
Collinson FX Market Commentary - Aug 4 - USD up, EUR slips, GBP drifts
The stronger reserve triggered a slide in the bloated NZD, which fell to 0.7135, while the AUD stabilised around 0.7575 Markets were steady overnight, as EU Services and Composite PMI data came in slightly above expectations, in line with similar releases in the US and China. The US ADP Employment reported an improvement in private sector jobs. This lead to a rebound in the USD, with the EUR slipping to 1.1150, while the GBP drifted to 1.3320.
Posted on 4 Aug
Collinson FX Market Commentary - Aug 3- Australia cuts rate again
The AUD fell back to 0.7500, but under international consideration, bounced back to 0.7600! The AUD fell back to 0.7500, but under international consideration, bounced back to 0.7600! Central Bank activity has been considered under the global QE. The KIWI has also been buoyant, afflicted by global Monetary Policy, rising above 0.7200. The Reserve currency has reinforced the reality of a weaker global economy, drifting lower, undermined by the Fed.
Posted on 2 Aug
Collinson FX Market Commentary - July 30-31- US growth well short
The NZD now looks to test 0.7200, confounding the impotent RBNZ, while the AUD challenged 0.7600 The Dollar crashed after the GDP numbers, with the EUR trading 1.1180, while the GBP hit 1.3230. The failure of the Fed to implement telegraphed rate rises, has hit the Dollar as the reserve, triggering support for commodity currencies despite weakness in demand. The NZD now looks to test 0.7200, confounding the impotent RBNZ, while the AUD challenged 0.7600.
Posted on 1 Aug
Collinson FX Market Commentary - July 29 - Italy sweats on stress test
This took the shine off the recent rally in the NZD which slipped back to 0.7060 The JPY remains firm, trading around 105.25, in preparation. Commodity demand was slack on the energy and agricultural front, while metals eked out some gains. This took the shine off the recent rally in the NZD which slipped back to 0.7060, while the AUD continued to toy with the 0.7500 mark.
Posted on 30 Jul