Please select your home edition
Edition
Collinson and Co

Collinson FX Market Commentary- August 27, 2012 - Central Bank action

by Collinson FX on 27 Aug 2012
Image of the Day San Francisco - America’s Cup World Series Day 4 Luna Rossa/Studio Borlenghi

Collinson FX market Commentary: August 27, 2012

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

Co-ordinated endorsements for Central Bank action had the desired effect on equity markets with a rally to close the week. The ECB announced the prospect of Bond-Buying to target bands for yields to restrict the cost of rising debt. This will effect markets and drive interest rates lower, short term, although the funding of this will rely on printing Euro $. This is inflationary and has the effect of destroying wealth of citizens to bankroll the fundamentally flawed and bankrupt nations.

Merkel has reiterated the need for Greece to fulfill commitments under the bailout clauses but has appeared with Samaras in Berlin to show support. Bernanke, coincidentally, also endorsed further QE action promising delivery of future dope to the addict. It is unlikely that he will act prior to the November Presidential election for fear of Political bias and the ECB is restricted by legal restraints and unity amongst members.

The EUR is trading around the 1.2500 mark and lack of Central Bank action will undermine confidence but action will undermine the EUR. Damned if you do.....!? Markets are very wary of the USD and the EUR as is witnessed by the cross rates. Central Bankers will gather this coming week in Jackson Hole, Wyoming, providing furtile ground for jawboning and markets will be determined by participants. In the US, Durable Goods orders increased by 4.2% buoyed by strong airplane orders thus supporting improved market sentiment.

The rally in equity markets failed to improve the prices of commodites as monetary stimulus does not improve global demand! This is the problem with double dip recession hitting the European market. The AUD drifted lower to trade around 1.0400 and is looking extremely vulnerable to increasingly weaker global markets.

The KIWI has reacted relatively well with soft commodities faring better and the KIWI holding above 0.8100. On to Wyoming!


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 - Apr 26 - French joy but ANZAC slides
The AUD slipped back to 0.7525, while the KIWI plunged through 0.7000 Markets exploded in reaction to the first round of the French Presidential elections. The French CAC rallied over 4%, with Centrist candidate Macron, leading through to a run-off with LePen. Polls predict an easy win for Macron, who has been endorsed by the traditional left and right wing parties, but it is a two horse race?!
Posted on 25 Apr
Collinson FX Market Commentary - Apr 25 - Two week cruise to victory?
The AUD slipped back to 0.7550, while the KIWI looks to test 0.7000, on the downside Markets exploded in reaction to the first round of the French Presidential elections. The French CAC rallied over 4%, with Centrist candidate Macron, leading through to a run-off with LePen. Polls predict an easy win for Macron, who has been endorsed by the traditional left and right wing parties, but it is a two horse race?!
Posted on 25 Apr
Collinson FX Market Commentary - Apr 22 - Trump's action sparks rally
Markets rallied to close the week with Trump signing executive orders for tax reform and financial deregulation. Markets rallied to close the week with Trump signing executive orders for tax reform and financial deregulation. Tax reform is likely to come next week and financial deregulation is likely to come in the form of repeal of the Dodd/Frank legislation. This will release markets and fuel the rally. France hold the first round of the Presidential elections this weekend with the possibilities ensuri
Posted on 24 Apr
Collinson FX Market Commentary - Apr 21 - NZD struggles
AUD moving above 0.7500, while the NZD is battling to hold 0.7000. The EUR held 1.0700, while the GBP is consolidating the lofty gains posted by the snap-election, as elections dominate markets. Commodities currencies were steady, with the AUD moving above 0.7500, while the NZD is battling to hold 0.7000.
Posted on 20 Apr
Collinson FX Market Commentary - Apr 20 - AUD drops on confidence loss
The rising reserve is testing the 0.7000 number on the NZD, while the AUD fell below 0.7500 European markets are under pressure with the arrival of the French elections. It look like a right-left run-off is the likely result but on the extremes. LePen and a candidate from the left will go through to a final run-off. This will drive markets into a nervous period
Posted on 20 Apr
Collinson FX Market Commentary - Apr 19 - Early election jumps UKP
The reserve softened allowing, the NZD to consolidate above 0.7000, supported by dairy prices. European markets were thrown a curve ball, when UK PM May called for an early election, while the pending French election has the prospect of upending the EU. The snap election in the UK is seen as an opportunity to consolidate and validate the Tory Govenrment leading in to Brexit.
Posted on 19 Apr
Collinson FX Market Commentary - Apr 16 - Trump jawbones USD down
The commodity currencies surged, with the AUD jumping almost a big figure, to 0.7570. The commodity currencies surged, with the AUD jumping almost a big figure, to 0.7570. The KIWI was testing 0.6900, on the downside, but spiked towards 0.7000 with the Trump jawboning. The coming week is full of significant global economic data releases which will impact currencies while Geo-Political developments remain the major driver of any substantial moves.
Posted on 16 Apr
Collinson FX Market Commentary - Apr 13 - KIWI set to take a dive
The AUD fell back to 0.7475, while the NZD looks to test dangerous levels below 0.6900 The AUD fell back to 0.7475, while the NZD looks to test dangerous levels below 0.6900, despite steady commodity prices. Local House prices in NZ may have a marginal impact, along with Australian confidence data, but major directional drivers are coming from the USA. The AUD attempts to regain 0.7500, with local Consumer Confidence confirming rising sentiment, despite the reserve.
Posted on 13 Apr
Collinson FX Market Commentary - Apr 12 - US on financial reform path
Commodities remained firm, supporting the associated currencies, with the NZD holding 0.6950. The Dollar was steady, with the EUR trading 1.0600, although the Yen moved up to 109.70. Commodities remained firm, supporting the associated currencies, with the NZD holding 0.6950. The AUD attempts to regain 0.7500, with local Consumer Confidence confirming rising sentiment, despite the reserve.
Posted on 11 Apr
Collinson FX Market Commentary - Apr 11 - Cordiality or fireworks?
Commodities were steady, with the NZD trading around 0.6950, while the AUD attempts to regain 0.7500 The looming French elections have the potential to disrupt European markets and will have flow on effect on global markets. The EUR traded below 1.0600 while the Yen pushed 111.00. Commodities were steady, with the NZD trading around 0.6950, while the AUD attempts to regain 0.7500.
Posted on 10 Apr