Please select your home edition
Collinson and Co

Collinson FX Market Commentary- September 14, 2012 - Bernanke acts

by Collinson FX on 14 Sep 2012
Image of the day "We’re OK, they are clear astern! " ETNZ’s AC 72 takes aim at one of the Friday night racers on Auckland’s Waitemata harbour © Richard Gladwell

Collinson FX market Commentary: September 14 2012!Click_here to find out how to get CollinsonFX's free iPhone app

Bernanke finally acted as promised/threatened to do!?

He has announced a open ended purchase of Mortgage Debt of $40 Billion/month to counter weak economic data especially unemployment. Bernanke downgraded forecasts for GDP growth in 2012 while revising 2013 and 2014 upwards. No doubt the far date forecasts will be reviewed lower if the economic stagnation continues. The QE3 has surprised many with the Presidential elections around the corner as this could be construed as partisan especially since Romney has expressed support for a strong Dollar and the pink slip for Bernanke!

Equity markets broke through technical levels testing 2007 highs on a sugar boost. Economic conditions are slowing with a recession gripping Europe and impacting Asia and the US so this is hardly good news. The EUR rallied to test the 1.3000 levels with the GBP reaching 1.6150. Commodities surged with the news as the USD is undermined.

The associated currencies benfit with the breaking AUD 1.0500 and the KIWI testing 0.8300. Bernanke denies inflationary pressures due to the lack of growth but long term this will be the genie released from the bottle.

The strength of the once mighty Dollar now relies on a Republican victory in November and the dismissal of Bernanke and fiscal responsibility from the Government!

Collinson FX market Commentary: September 13 2012

Little action ahead of the FOMC meeting tonight with markets stalled.

In Europe Germany approved the ESM bail-out package giving the green light to Super-Mario! Economic indicators point to recession with the added threat of rising inflation which makes for a nasty recipe for disaster.

The EUR continued to gain with risk appetite to 1.2900 and the GBP 1.6100. The US awaits the FOMC statement tonight and reacts to their ambassador to Libya being killed.

This will be a test for Obama as the elections draw closer and the people will expect more than an apology. Risk appetite pushed the AUD to break 1.0500 but dipped as markets flatline.

The KIWI threatens 0.8200 and these levels are technical highs which may prove to be too big a mountain to conquer.

Collinson FX market Commentary: September 12 2012

Good news is bad news and bad news is good! It is a wonderful world of make believe seemingly infantile in the nature. Bad economic news brings the prospect of further Central Bank intervention and thus further liquidity slushing around an already flooded economy.

The news from the US has been weak and deteriorating and yet risk appetite is on the rise with the prospect of QE3. Equities are now trading at 2007, 5 year highs on the sugar high of monetary stimulus.

Fundamentals are dreadful and something must give... besides the US$! German Courts look set to sanction the ECB's Bond Bailout package which gave momentum to equities and currencies.

The EUR rose to 1.2860 and the GBP 1.6075. China has endorced the projected growth rate of 7.5% giving confidence to commodity markets and boosting the AUD back to 1.0450.

The KIWI also booked gains rising to test 0.8200 with further rises in the local Real Estate market as House Prices surge. Moody's have indicated the AAA status of the USA may be under threat unless they address the spiralling Debt/GDP ratio.

This had little effect of market confidence as the addicts look to the Fed for further assistance Thursday!

Collinson FX market Commentary: September 11 2012

Economic data continued to disappoint markets with Asia leading the way. China disappointed with trade weakening and the Chinese stimulus is an attempt to address this through a domestic replacement. Chinese Industrial Production has also slowed with inflationary pressures growing. Japan GDP suffered from weaker trade numbers and now the two biggest economies in Asia are reflecting the recessionary nature of the global economy.

The Bond-Bailout package has drawn a line under debt costs for imperiled nations allowing some space but done nothing the address the cause. This week will focus closely on the German Courts and their preference to support the ECB bailout. The decision will come ahead of a meeting of the 'Troika' of the ECB, EC and IMF. Another headliner from Europe is the elections in the Netherlands which should reflect the reluctance of the people to support the EU and the bailouts.

The US has taken the new measures in Europe and bought risk with the USD falling and equities rallying strongly. Markets will watch Europe and the FOMC rate decision. The EUR remains well supported at 1.2750 and the GBP trading around 1.6000. US markets are now relying on QE and Central Bank intervention as economic conditions deteriorate.

The AUD remains well bid trading 1.0330 and the KIWI dropping under 0.8100.

NZ Trade data confirms the global contraction as does yesterdays fall in Manufacturing. The RBNZ will announce their plan of action which will be nothing as usual. They should cut rates and provide stimulus in an effort to boost the domestic market and counter the unrivaled liquidity in Asia, Europe and the US!

The Reserve Bank will be wary with the boom in the housing market taking advantage of low interest rates. House Sales rose 16.2% and House Prices 1.3 for the last month. Low interest rates are one part of the perfect storm. Demand has risen with limited supply as building costs have skyrocketed over the previous decade.

Auckland has led the way and has now risen above pre-GFC levels and presents a problem to authorities.

Equities are looking nervous and any major moves will impacts currencies and commodities.

For more on Collinson FX and market information see: and

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 - Oct 28 - Brit GDP despite Brexit
The AUD slipped below 0.7600, while the NZD looks to test 0.7100 The AUD slipped below 0.7600, while the NZD looks to test 0.7100, after deteriorating trade numbers disappointed. The NZ Trade deficit increased, with a surge in imports, while Exports remained static. Look to US GDP growth data to drive speculation on the Feds rate decision next week.
Posted on 28 Oct
Collinson FX Market Commentary - Oct 27 - Aussie CPI jump surprise
The Australian CPI jumped to 0.7%, greater than expected, boosting the AUD over 0.7700 The Australian CPI jumped to 0.7%, greater than expected, boosting the AUD over 0.7700. This was not sustained in overnight markets, with the AUD slipping back to 0.7650, while the NZD traded around 0.7150. NZ domestic markets will consider Trade data today and speculate on the important US GDP number to be released at the end of the week.
Posted on 27 Oct
Collinson FX Market Commentary - Oct 26 - Conflicted Dollar
The NZD stabilised around 0.7150, while the AUD managed to consolidate above 0.7600 The NZD stabilised around 0.7150, while the AUD managed to consolidate above 0.7600, ahead of the important CPI number release today. The inflation data is expected to show a rise in inflation and thus growth. This would support the local currency but any failure in the CPI data would impose significant downward pressure on the AUD.
Posted on 25 Oct
Collinson FX Market Commentary - Oct 25 - Oil does a quiet slide
The rising reserve and weaker commodity prices impacted the associated currencies, with the AUD testing 0.7600 The rising reserve and weaker commodity prices impacted the associated currencies, with the AUD testing 0.7600, while the NZD dropped back to 0.7110. Central Bank activity remains the major driver of currency direction, with economic data release, influencing the discussion.
Posted on 25 Oct
Collinson FX Market Commentary - Oct 22 - USD finds some legs
The AUD has crashed back to 0.7600, while the NZD has finally found logic, falling to 0.7150. General economic data has been benign confirming the weak economic situation that has prevailed post-GFC. Political leadership is reflected well in the economy. The Dollar found some legs, with the EUR moving back to 1.0850, while the GBP slipped to 1.2225. Commodities drifted, impacting the associated currencies, eventually .
Posted on 24 Oct
Collinson FX Market Commentary - Oct 15 - Positive sign from US sales
AUD breaks back above 0.7600, while the NZD looks towards 0.7100 again US Retail Sales met expectations and were positive! This gave the markets some enthusiasm and lead to further speculation for the much vaunted Fed interest rate rise. This took the shine off the equity rally. The University of Michigan confidence report was decidedly negative
Posted on 17 Oct
Collinson FX Market Commentary - Oct 14 - Chinese exports crash
The NZD rallied back towards 0.7100, while the AUD floundered around 0.7560, reversing the recent cross rate moves. Chinese Trade data dominated global markets overnight, with little economic data release of import, in Europe or the USA. Chinese exports crashed 10% for the month (5.6%p.a.), while imports fell 1.9%. The dreadful trade data confirmed the weak global demand for the world factories product.
Posted on 14 Oct
Collinson FX Market Commentary - Oct 13- It's the US economy, Stupid!
The AUD has ceded 0.7600, now trading 0.7560, while the KIWI tried to build a firewall above 0.7000. Current US GDP growth is a depressing 1%, with all reviews on the downside, reflecting the parlous state of the economy. The Fed telegraphed four rate rises this year and none have eventuated so it is hard to believe the rhetoric.
Posted on 14 Oct
Collinson FX Market Commentary - Oct 12- Light week grinds idle minds
AUD dipping to 0.7540, while the NZD dipped to 0.7050 The EUR slipped to 1.1050, while the GBP tested new lows, falling to 1.2200. Commodity currencies were not immune, with the AUD dipping to 0.7540, while the NZD dipped to 0.7050. A light economic data week allows diversion and musing over Central Bank perceived actions.
Posted on 12 Oct
Collinson FX Market Commentary - Oct 11 - Oil surges on Russian deal
Recent weakness in the NZ Dollar, pushed the KIWI back to 0.7120, while the AUD held above 0.7600. Oil prices surged to $51/barrel after President Putin confirmed collusion on a global cap on production with the OPEC cartel. German Trade data continued to show resilience with both Exports and Imports showing healthy gains.
Posted on 10 Oct