Collinson FX Market Commentary- Dec 3 - KIWI back a 'big figure'

by Collinson FX on 3 Dec 2014 Collinson FX market Commentary: December 3, 2014

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DEc 3 - Global equities resumed the bull run and setting new records in the US. Manufacturing data signalled improvements across Asia, Europe and the USA. The prospects of extended loose monetary policy settings from Europe, China and Japan only throws petrol on to the fire. The ECB is expected to hold stimulus in place thus undermining the currency. The EUR dipped below 1.2400 while the GBP slipped to 1.5640.

The RBA was the latest to review interest rates. The 'dovish' sentiment was reflected in the statement, observing weakness in the global economy, therefore weak demand for commodities as the reason for extended record low interest rates. Markets now look for rate cuts in to the future to counter soft global demand for iron ore and coal. The currency jumped after the statement, back to 0.8500, but global markets digested the commentary and pushed the currency to below 0.8440. Australian exports jumped, improving the Current Account, while Building Applications spiked 2.5%, sparked by the record low interest rates.

This did little to counter the commodity demand story unfolding and hitting the domestic economy. NZ Commodities contracted 1.6% and pushed the KIWI back a 'big figure' to trade below 0.7800. Prospects of global demand flagging is hitting commodities hard and the associated currencies are acting accordingly. The NZD currently traders 0.6280 and 0.4970 against the EUR and GBP. The NZDJPY cross did not feel the same pressure overnight, holding 92.60, while the NZDAUD slipped back off yesterdays highs to trade 0.9210 this morning.

Collinson FX market Commentary: December 2, 2014
Dec 2 - European equity markets were significantly lower with Manufacturing data generally contracting across the EU and Chinese Manufacturing PMI, slipping further south. This did not extend to the UK, which showed an expansion in Manufacturing, boosting the GBP over a 'big-figure' to 1.5750.

The EUR is testing 1.2500 but remains under pressure from the ECB and economic data. US Markets drifted lower and Manufacturing remaining fairly static, missing expectations, while 'Black Friday' retail sales disappointed. Chinese data did not assist the commodity currencies with the AUDUSD trading around 0.8500, while the KIWI is again testing 0.7900, on the upside.

A deluge of economic data peppers markets all week and the start has not been promising! The NZD Currently trades 0.6315 and 0.5001 against the EUR and GBP, with the NZDJPY cross pushing trough the 93.00 big figure. The NZDAUD cross is the big winner, trading 0.9250 this morning.

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