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.richardgladwell.com

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 - June 26 - Europe is biggest loser
The Brexit is a bigger disaster for the EU than the UK. The British are now free to pursue trade, globally The Brexit is a bigger disaster for the EU than the UK. The British are now free to pursue trade, globally, assuming the greatest trade nation status it once occupied. Buy GBP's! More exports for NZ and Australia! The Dollar was the safe haven play as expected.
Posted on 25 Jun
Collinson FX Market Commentary - June 25 - Markets initially hope IN
Markets traded as if 'remain' had won the brexit referendum, as polls and odds indicated Markets traded as if 'remain' had won the brexit referendum, as polls and odds indicated, with equities surging and the Dollar surrendering recent gains. The results will be out soon enough, but the implications are clear, with the GBP surging to 1.4915. The retreat in the Dollar was reflected across the board, with the EUR rising to 1.1350
Posted on 24 Jun
Collinson FX Market Commentary - June 23 - Markets on eggshells
Brexit remains the only issue driving markets overnight. Brexit remains the only issue driving markets overnight. Yellen, the Fed President, completed her second day in front of law makers. She cited the disastrous Non Farm Payrolls numbers last month, referring to it as 'transitory', confirming interest rate rises. Rhetoric is fairly empty. although hugely important to markets, driving the Dollar lower.
Posted on 24 Jun
Collinson FX Market Commentary - June 24 - Waiting for Brexit
Brexit remains the only issue driving markets overnight. The Dollar is treading water, ahead of the Brexit vote, with the EUR holding below 1.1300 and the JPY crawled above 104.00! The GBP remains below 1.4700, recovering with the resurgent 'remain' campaign, although the race will be tight. Bookies are overwhelmingly with the status quo, so it is hard to see a radical result, unfortunately.
Posted on 23 Jun
Collinson FX Market Commentary - June 22 - Brexit swing spooks Brits
The KIWI hit year highs, around 0.7169, but retreated back to 0.7150. The AUD breached 0.7500 overnight, but settled back around 0.7470, driven by a drifting Dollar. The KIWI hit year highs, around 0.7169, but retreated back to 0.7150. All eyes remain on the UK vote, which will consume markets for the entire week, with the latest polls driving currencies and equities.
Posted on 22 Jun
Collinson FX Market Commentary - June 21 - Brexit poll points to stay
UK Brexit polls turned sharply over the weekend, surging in a reversal, leaning back to the remain campaign. Commodity prices regained some momentum, bolstering the associated currencies, pushing the NZD to 0.7100 and the AUD to 0.7450. This is a week where the referendum will dominate markets and change seems unlikely. The dire warnings and pressure internally and externally are overwhelming.
Posted on 21 Jun
Collinson FX Market Commentary - June 18 - Bookies tip Brits to stay
The KIWI has attracted further interest, post GDP, trading around 0.7050. The aftermath of the murder of the Yorkshire MP has left an unnatural silence hanging of the suspended Brexit debate. The intermission is likely to end in a subtle finger pointing from the 'stay' campaign, as desperation rises, to combat polls. The bookies still have the remain mob winning, which is probably likely, as change is more difficult.
Posted on 19 Jun
Collinson FX Market Commentary - June 17 - GDP rise pumps KIWI
NZ GDP was better than expected, rising 0.7%. This added further fuel to the currency, which jumped back to 0.7040 NZ GDP was better than expected, rising 0.7%, leading to a rise of 2.8% annually. This added further fuel to the currency, which jumped back to 0.7040, reflecting the positive state of growth in comparison to other western economies. The AUD slipped back to 0.7350, despite steady Employment data, with the pending election consuming the local scene.
Posted on 17 Jun
Collinson FX Market Commentary - June 16 - US fails to raise interest
NZ Home Sales continue to thrive, in the low rate environment, while the KIWI hits exports. The Dollar slipped after the FOMC, pushing the EUR up to 1.1250, while the JPY moves in to intervention territory in the 105's. The AUD consolidated above 0.7400, immersed in their own pending election, while the NZD holds above 0.7000. NZ Home Sales continue to thrive, in the low rate environment, while the KIWI hits exports.
Posted on 16 Jun
Collinson FX Market Commentary - June 15 - Brexit consumes markets
The AUD has dipped to 0.7350, while the NZD is testing 0.7000 on the downside. Flows are heading to safety. There was nothing on the economic front to distort markets moves, but there is little to deprive attention from the 'Brexit', with the leave campaign gaining momentum. The EU is vulnerable and the UK exit could tip the scales. We have a whole week to go! The AUD has dipped to 0.7350, while the NZD is testing 0.7000 on the downside. Flows are heading to safety.
Posted on 15 Jun