Please select your home edition
Edition
Collinson and Co

Collinson FX Market Commentary- December 19, 2013 - Confidence builds

by Collinson FX on 19 Dec 2013
Auckland 18ft Skiff Championships - December 15, 2013 Richard Gladwell www.photosport.co.nz

Collinson FX market Commentary: December 19, 2013

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

Markets eagerly await the FOMC meeting with many tipping the commencement of tapering....As a result the Fed has tapered their purchases by 10 bio per month effect immediately. Bernanke is set to leave as Chairman to be replaced by Janet Yellen at the end of January. The likelihood of the leopard changing its spots is low and Yellen is more of a dove than he. The triggers to remove QE have been set and neither has been achieved but economic data is moving in the right direction.

The targets were Unemployment below 6.5% (currently 7%) and Inflation over 2.5% (currently under 2%). Housing Starts surged 22.7% in the USA, smashing expectations and fulfilling the improvement trends, although Building Permits and Mortgage Applications fell. Tapering will bring a resurgent Dollar and thus force pressure on global currencies.

The EUR holds relatively high levels at 1.3750 and the GBP 1.6400 but remain vulnerable to tapering. Commodity currencies also relect the pressures from the reserve currency with the AUD slipping below 0.8900 and the KIWI 0.8225. NZ Business Confidence continues to build reflecting the slow recovery in the domestic economy and local markets await GDP data releases today!


Collinson FX market Commentary: December 18, 2013

The two day meeting of the Federal Reserve began overnight with the results announced tonight. Expectations are high that the tapering process may be about to commence and monetary expansionism is about to be curtailed.

The economy appears to be on the mend, offering little in the way of excuses, from the Fed. Bernanke is on his way out and his replacement is expected to be more of a dove. The pressure is on but the resilience and commitment of the Central bank will probably result in inaction. The currencies hover with the EUR 1.3750 and the GBP 1.6275. The Fed controls the markets and little movement presumes a failure to act. All will be revealed tonight and despite growing confidence tapering will have an impact. Commodities remained well bid with the KIWI holding 0.8240.

The AUD is under extreme pressure from the RBA, who declined to cut rates, but relied upon debasement as a strategy to advantage any growth in the reserve currency. The AUD continued recent declines testing 0.8900 overnight. All depends on the FOMC results overnight!?


Collinson FX market Commentary: December 17, 2013

Equity markets rebounded strongly, after two consecutive weeks of losses, ahead of the two day FOMC meeting. The series of positive economic data releases lately have confirmed the recovery in the US and threatened the QE Infinity program. The Fed are suspected of beginning the tapering process and this has triggered the last couple of weeks of downside on equity markets, globally.

The Dollar, has regained long forgotten lustre, pushing commodities lower and the associated currencies. The AUD, has come under spectacular pressure, crashing to 0.8950 cheered on by the RBA. 'Jawboning' (and perhaps monetary intervention??) by the Central banks have assisted in the sentiment sparked by the recovery in the USD. The RBA Minutes will be released giving insight into the logic and language of the Bankers. The recent gains by the GBP have been reversed, slipping to 1.6300, with the EUR hitting the 1.3750 wall.

NZ Consumer Confidence continues to gain ground and has been reflected in the relative strength of the currency in the down markets. The KIWI holds 0.8230 and has broken above 0.9200 against the AUD. The once all-important Tankan report was released with some strong gains in the Japanese economy, although the Chinese Flash Manufacturing PMI declined, neutering any substantial momentum from Asia.

All eyes remain on the Fed and the growing belief the tapering may begin with many arguing the growing strength of the economy will counter the effect on markets.

Headlines

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 - Mar 24 - US tetters on health vote
The NZD held above 0.7000, despite a rising reserve, while the AUD continued to drift lower. The RBNZ left rates unchanged, as expected, observing weaker than expected growth allowing accommodative monetary policy. The Central Bank welcomed the weaker KIWI, while jawboning it lower, to little effect. The NZD held above 0.7000, despite a rising reserve, while the AUD continued to drift lower.
Posted on 24 Mar
Collinson FX Market Commentary - Mar 23 - NZD rallies against trend
Commodities continued to lose ground and the AUD suffered, falling below 0.7700, while the NZD bucked the trend. Commodities continued to lose ground and the AUD suffered, falling below 0.7700, while the NZD bucked the trend. The NZ Dairy Auction was surprisingly bullish, paving the way for a rally in the currency, pushing up to 0.7050. The RBNZ will announce the rate decision this morning, with no movement expected, although rhetoric is likely to impact.
Posted on 22 Mar
Collinson FX Market Commentary - Mar 22 - DOW drops 200 points
The AUD fell below 0.7700, after the Bank observed the Feds 'rate rise policy' Oil prices resumed their downward moves, reflecting commodity prices, in general. This did not assist the associated currencies, with the NZD drifting to 0.7020, while the RBA impacted the AUD. The RBA minutes revealed concerns over the growing real estate bubble and weak wage growth, but it was the commentary on the US Dollar that hit the currency.
Posted on 21 Mar
Collinson FX Market Commentary - Mar 20 - GBP slips on Brexit news
The AUD pushed back to 0.7700, while the NZD regained 0.7000, awaiting Mondays Dairy Auction. The GBP slipped after the UK PM, Theresa May, confirmed the trigger of Article 50 on March 29. Oil prices drifted lower and the Chicago Fed Manufacturing Activity Index remained positive. The softer reserve allowed commodity currencies to book further gains, with the AUD consolidating above 0.7700, while the NZD pushed towards 0.7050.
Posted on 21 Mar
Collinson FX Market Commentary - Mar 19 - Handbrake pulled on excess
The AUD pushed back to 0.7700, while the NZD regained 0.7000, awaiting Mondays Dairy Auction. What could have been a tumultuous week, Geo-Politically and Economically, faded into obscurity. The Fed raised rates, as expected, pushing a dovish commentary to calm any excesses. The Dutch election saw the status quo come through virtually unscathed, allowing a massive sigh of relief for the EU, with the anti immigration party also being anti-EU.
Posted on 19 Mar
Collinson FX Market Commentary - Mar 17 - Dutch Brexit fails in poll
The AUD slipped back to 0.7660, while the KIWI drifted back to 0.6970, awaiting the resumption of the Dollar run. The Dutch elections spread relief through European markets after the failure of the far right, anti EU party to live up to pre-poll expectations. The preservation of the status quo, will reduce fears held for the EU, especially considering the pending elections in France and Germany.
Posted on 16 Mar
Collinson FX Market Commentary - Mar 16 - US Int Rate up, Dollar down
The US Federal Reserve raised interest rates, for the second time post-GFC The US Federal Reserve raised interest rates, for the second time post-GFC, confirming the embarkation of a rate rise program for 2017. There were no surprises and the associated commentary confirmed the economic recovery and calmed markets. 'Buy the rumour, sell the fact'! The Dollar retreated after the anticipated rate rise
Posted on 15 Mar
Collinson FX Market Commentary - Mar 15 - Oil prices drop
Oil Prices hit the headlines overnight, falling to $47.70, hitting energy companies and dragging equities lower. Oil Prices hit the headlines overnight, falling to $47.70, hitting energy companies and dragging equities lower. The lower prices are a direct result of oversupply, with global stocks rising, as production does not inhibit. Equities were not assisted with the prospect of rising interest rates, as the FOMC sat down for their two day meeting, with high expectations.
Posted on 14 Mar
Collinson FX Market Commentary - Mar 14 - Big week ahead
AUD back below 0.7600, while the NZD has regained 0.6900 Markets were steady on what could develop into a huge week for currencies. This coming week the UK look to trigger article 50, the 'Brexit' clause, which will impact the GBP. The Dutch go to the elections and a strong showing of the anti-EU parties could adversely impact the EUR, both short term and fundamentally.
Posted on 13 Mar
Collinson FX Market Commentary - Mar 11-12 - KIWI recovers above 69c
Commodity currencies regained some ground, with the AUD back to 0.7550, while the KIWI jumped back above 0.6900. The Dollar has been on a bull run, which is likely continue, when the Fed embarks on a rate rise program for 2017. The Dollar settled to close the week, with the EUR jumping to 1.0690, supported by stronger than expected German trade data. Commodity currencies regained some ground, with the AUD back to 0.7550, while the KIWI jumped back above 0.6900.
Posted on 12 Mar