Please select your home edition
Edition
Collinson and Co

Collinson FX Market Commentary- February 21, 2013 - Questions asked

by Collinson FX on 20 Feb 2013
C-Tech - JJ Giltinan 18ft Skiff Championship 2013 Lyn Holland © http://www.facebook.com/pages/Auckland-Skiff-League/226670420679146

Collinson FX market Commentary: February 21, 2013

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


US Markets conceded yesterdays gains after the FOMC Minutes revealed a growing number of board members are questioning the 'costs and risks' associated with Quantitative Easing. The move is to 'taper or ease' QE infinity before it was previously envisioned. This news pushed equities lower and the Dollar higher.

The EUR crashed below 1.3300 and the GBP 1.5220 assisted by some poor Employment data from the UK and Bank of England advocating further easing in Monetary policy. This was not the only Central Bank 'jaw-boning' the currency with a long awaited fight-back from RBNZ Governor Wheeler. The currency wars have had collateral damage in terms of the KIWI and AUD disadvantaged by attractive yields and stubborn Monetary Policy.

Wheeler commented that the KIWI was too high and he would intervene. The NZD reacted accordingly crashing from above 0.8400 to be trading below 0.8350. The AUD has also slipped back to 1.0245 after the Fed triggered gains in the Dollar. US markets were not over zealous after Housing continued to defy all market commentators with Housing Starts collapsing 8.5%. This was on the back of the House Price Index taking a hit which blunts enthusiasm for a recovery in this sector which was to be a trigger for an economic recovery in the US.

The doubts entering into the collective minds of the Fed over the consequences of QE I, II and Infinity has finally started to recognise the reality of this unprecedented expansion of liquidity. This may be a signal to Central Banks to end the currency wars although KIWI and AUD need to play a lot of catch up!


Collinson FX market Commentary: February 20, 2013

US Equity markets rallied after the long weekend with some good news from Europe gave the bulls some heart. The all important, ZEW Economic Sentiment index rose to 48.2, which blew past expectations and hit 3 year highs. The reading renewed confidence that the German economy is in recovery mode and that boosts prospects for the EU. This contradicts most recent economic data with New Car Sales and Construction both falling.

A continued turnaround would be necessary to have any sort of faith in the EU as momentum is certainly negative. The EUR drifted lower at The US had little good news with the NAHB House Market Index falling below expectations at 46. Equities embraced the good news from Europe and tested 5 year highs which now is at crucial technical levels. The Dow needs to break these levels and then attack the all-time high of 14,164, but a failure to break the ceiling may see a retracement.

It has been a continuum of bleak news on the economic front but Mergers and Aquisitions have sparked confidence in equities. Activity in this area reflects a necessity for aquisition to gain growth with little happening in the generic world. The AUD regained some ground with the renewed global confidence, demand dragging it to 1.0365 and the KIWI to 0.8455


Collinson FX market Commentary: February 19, 2013

Markets were quiet Monday as the US was closed for Presidents Day holidays. European Markets drifted lower with the EUR down to 1.3350 and the GBP 1.5465 after dovish comments from ECB President, Draghi. He observed that the EU's recovery remained weak and inflation was now falling below 2% as growth contracts at an alarming rate. Italian elections, due in a week, also hold the promise of further uncertainty and thus Bond yields look to be on the rise.

The AUD traded below 1.0300 with New Vehicle Sales falling for the month and Political turmoil continuing in election year. A new challenge for the Labor Government leadership appears in the offing as Gillard crashes in the polls.

The KIWI held on to strong levels around 0.8450 after G20 assurances of an end to the 'currency wars'! Market action is likely to heat up as the Chinese return to the fray and the US react to a short week of data release.

Inherent problems surround Europe and deficit/debt issues are consuming the US and Europe. Instability politically and weak economic growth does not bode well for near term prospects.

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