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Collinson FX Market Commentary- September 5, 2013 - Dollar rebounds

by Collinson FX on 7 Sep 2013
Finn100213 (17) - New Zealand Finn Nationals, Takapuna, Februaru 2013 Richard Gladwell www.photosport.co.nz

Collinson FX market Commentary: September 5, 2013

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No major surprises overnight, with the Bank of England and the ECB leaving rates unchanged and no let up from the accommodating stance on Monetary Policies.

The Syrian crises remained in limbo with no new developments giving no reason for markets to panic. In the US, the ADP Jobs Report added 176,000 jobs in the private sector, broadly in line with expectations. The problem lies with a massive increase in expected job cuts with the Challenger Index rising a massive 56.5%. How this translates to the all-important Non-Farm Payrolls will be a market mover.

The Dollar rebounded with the EUR dipping to 1.3120 and the GBP 1.5600 as economic conditions in Europe remains static. The high flying Aussie stalled and retraced back to 0.9115 with the rise in the USD and a softening of commodity prices.

The election looms and we eagerly await the impact of a Conservative victory on the currency. The KIWI also slipped in the face of a rising reserve currency, pushing south to 0.7880. All eyes will now be on Non-Farm Payrolls with a Caveat on Syrian developments.

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Collinson FX market Commentary: September 3, 2013

US Markets were closed for Labour Day with confidence higher as equity markets globally, rally with reduced threats of military action in Syria and Obama looking for an excuse to 'not intervene'.

This was good for markets and economic data supported rallies. Chinese PMI rose, breaking recent contractions and boosting prospects of growth. Europe followed suit with PMI rallies in Italy, Germany and the EU overall. The UK saw a major spurt in the PMI which has continued the support the GBP which has rallied back to 1.5530 while the single currency has slipped back to 1.3190.

Commodities reacted well to Chinese data which supported a surge in the AUD looking to test the big, big 0.9000 level once again. Housing Prices rose and Building Approvals rose 10.8% for the month and 28.3% for the year.

The RBA will influence markets, but little is expected with an election on Saturday, although commentary may give some pause. The KIWI heading towards 0.7800, with some relief amongst improving global economic conditions. Huge week to come and much of the focus will be on Central bank activity as military action prospects subside.

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