Please select your home edition
Edition
Collinson and Co

Collinson FX Market Commentary- March 15, 2013 - Oz dollar gets turbod

by Collinson FX on 15 Mar 2013
- OKI 24hrs Race 2013, Lake Pupuke © Richard Gladwell www.photosport.co.nz

Collinson FX market Commentary: March 15, 2013

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

The surge in equities continues unabated rising on the smell of an oily rag! Who would stand in front of a runaway freight train and the bulletproof bulls are on the march. The $85 Billion the Fed pumps into the economy has to go somewhere and the only place with return is equities.

Economic fundamentals have been positive thus encouraging the risk takers. The flow in to the US Dollar has turned with the EUR regaining 1.0300 and the GBP back above 1.5000. The AUD hit the turbo charger yesterday after an unexpected surge in Employment. The resilient Australian economy broke records adding 71,500 jobs for the last month.

The news alleviated further pressure for interest rate cuts and pushed the AUD to 1.0350. The RBNZ held rates unchanged and forecast no changes for the next year which released pushed the KIWI south.

The over-performing currency recovered overnight to regain 0.8200. Economic justifications seem marginal and a correction is likely but there is a world of pain for short positions at the moment.


Collinson FX market Commentary: March 14, 2013

Markets remained steady, unaffected by the election of the new Pope Francis. European markets were still decidedly weak still facing some extremely dire economic issues with only a dim light at the end of the tunnel. EU Industrial Production fell 1.3% as most member countries wallow deep in recession.

The EUR traded 1.2950 and the GBP 1.4925 reflecting the state of the Union with more downside likely. In the US, Retail Sales rose 1.1% which was a strong result and gave new impetus to the Bulls in the QE infused equity markets. Weekly Mortgage applications fell 4.7% which is a reversal of recent news in the housing sector. Economic fundamentals have been turning positive of late, giving markets confidence, but keep the powder dry as Bernanke has brought the US to this point and fiscal responsibility must now be adopted.

The AUD was trading just under 1.0300 after a boost of 2% in Consumer Confidence but political turmoil engulfs the nation. The KIWI held 0.8230 after strong rises in House Sales and Prices. The housing bubble frightens Reserve Bank Governors and this will alleviate any pressure to cut rates in today's meeting. Fundamentals will continue to drive markets for the rest of the week.


Collinson FX market Commentary: March 13, 2013
nsatiable bulls took a break in the US with equities drifting and the resurgent Dollar retracing. The EUR rebounded to above 1.3030 although the maligned GBP tests the big figure of 1.4800. The Pound is doing what it should do, reflecting the weak economy and falling, thus stimulating exports and raising the costs of imports. This will make it harder for citizens but it is how free markets work!

Many EU nations turn green looking at this phenomena and sink further into depression with austerity and a single currency reflecting the mess that is the union. The US continues to profit a new surge in confidence as equities hit all-time highs with the mighty peso! Bernanke has acted to destroy the strong dollar and create a new peso to battle the fiscal ineptitude of the socialistic policies Democrats have foisted on the once great!

There is no way out of this conundrum as any tightening of monetary policy would result in debt default. Fiscal rectitude is the only remedy for this immoral debt acquisition. Commodity prices remain strong, with Chinese demand steady pushing the higher yielding AUD back to 1.0300 and the KIWI to 0.8225. There are many serious questions to answer before this utopia becomes a reality as fundamental economic questions remain unanswered.


Collinson FX market Commentary: March 12, 2013
Employment gains in the US have supported the rally in equities and pushed the DOW to ever new record highs. The only challenge now lies in technical target levels with Fibonacci now being examined for possible chart resistance points that traders can focus on as a trigger for the inevitable correction. Asian markets were weaker after Chinese Industrial Production and Retail Sales disappointed analysts expectations.

European markets also were challenged, with the Fitch downgrade of Italy after markets closed Friday. Financials were under pressure as the Political impasse in Italy continues and data confirmed a further contraction in the economy. GDP contracted 0.9% for the quarter which translates to 2.8% annually. This is bad news for one of the EU's leading economic powers and combines with ever deteriorating deficit/debt levels to drive unemployment to levels that threaten social cohesion.

The US brushed off any negatives, with new record highs in equities as economic data supported the equity rally and the US Dollar. The fundamentals are improving at the margin and certainly do not support the growing bubble in equities which is a product of a search for return in a liquidity flooded market. Investors a piling in, anxious not to miss the boat, but traders will be looking for the exit door with the ever growing threat of the inevitable correction.

Kiwi edged higher to .8220 and AUD to 1.0230.


Collinson FX market Commentary: March 11, 2013

The good news kept on coming in the US and equity markets continued to break fresh ground. The all important Non-Farm Payrolls beat expectations and added 236,000 Jobs, well above the 165,000 analysts had envisioned.

Unemployment fell to 7.7% and economic conditions seem to be on the rise. The flows back in to the US was reflected in the strength of the Dollar with the EUR consolidating below 1.3000 and the GBP struggling at 1.4915. Serious economic data releases in the UK and Euope will be a directional focus in the coming week.

The UK is mired in recession and has little in the way of relief. Having the Pound has probably saved them the austerity measures suffered by EURO participants and allowed currency advantages to boost trade. Fitch downgraded Italy to BBB after markets closed on Friday so we can expect a soft open to the new week with jitters filtering around the single currency zone.

The US goes from strength to strength with the Bulls in charge as the limitless sea of liquidity floods equity markets.

The flow back to the USD has left the AUD vulnerable trading under 1.0200 and the KIWI has slipped back to under 0.8200. With confidence on the rise the RBNZ is unlikely to move rates this week. US economic fundamentals may be the only brake on the rampant investors piling in to Share Markets!

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