Collinson FX Market Commentary- September 3, 2014 - NZD trades strong

by Collinson FX on 4 Sep 2014 Collinson FX market Commentary: September 3, 2014

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The USD Dollar surged overnight after positive Manufacturing data reduced the likelihood of extended QE from the Federal Reserve. The ISM Manufacturing expanded to 3 year highs and complimented recent growth data.

In contrast to the European Manufacturing, which is stagnant if not contracting, with expectations of further QE from the ECB. The EUR, understandably, dipped back to 1.3120 while the GBP crashed to 1.6475 as local manufacturing reversed recent growth. The RBA retained the current 2.5% rate while commentary reinforces the need for further stimulus. This did not assist the AUD, which dropped below 0.9300, despite Building Approvals rising.

The good news was on the political front, where the Conservative Government had a victory with the removal of the Mining Tax, boosting the most important sector in the Australian economy. The KIWI weakened, falling to 0.8300, with the approaching election looking anything but certain and the economy under self-imposed RBNZ pressure.

Geo-Political events continue to spiral out of control with another US Journo' beheaded and IS on the march. The Ukrainian crises is closer to a deal, with the Ukrainians realizing the Russians call the shots and reliance on the West is folly. Milk prices took another hit in the auction overnight.

The GlobalDairyTrade (GDT) Index hitting a new 2 year low of US$2,787, down from US$3,000 two weeks ago. Despite this the NZD did not lose too much ground, testing the 0.8300 mark on the downside. Despite this the NZD is still trading strongly against the EUR and GBP at 0.6310 and .5030 respectively.

Collinson FX market Commentary: September 2, 2014
Labor Day long week end in the US meant a quiet start to a huge trading week. The focus shifted to Asia and Europe with Manufacturing data contracting and offering no reason for confidence.

Chinese PMI contracted and EU data was the worst seen in over a year. This encouraged speculation of further Central Bank intervention reflected in Bond yields. The EURO remained under extreme pressure from economic fundamentals and Central Bank influence, trading 1.3125, while the GBP broke back above 1.6600.

Australian House Prices jumped, increasing the likelihood of a bubble, but off-setting the Chinese manufacturing numbers. The AUD managed to trade steadily around 0.9330 while the KIWI tested 0.8375.

The Ukrainian situation is spiraling out of control and the ISIS situation adds to global Geo-Political pressures. Everything will kick into action when the US Markets open tonight!

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