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Sail-World.com : Collinson FX Market Commentary: August 7, 2013 - KIWI recovers
Collinson FX Market Commentary: August 7, 2013 - KIWI recovers


'February 5,2013 SAilAuckland (15) - Day 4, Oceanbridge Sail Auckland 2013'    Richard Gladwell ©    Click Here to view large photo

Collinson FX market Commentary: August 7, 2013

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Markets continues to drift lower overnight with further commentary from Fed members, although the Dollar has gone the wrong way. Equities were lower after Cleveland Fed President observed the labour market improvements may warrant tapering and Chicago President Evans would not rule out tapering in September.

The talk of tapering is usually a buy signal for the USD but that has not happened. The EUR rose to 1.3335 and the GBP 1.5500 with slow improvement on the economic front boosting market perceptions. The KIWI took advantage of the falling Dollar recovering some recent losses to trade around 0.7950.

The AUD has also worked to return to the big, big figure of 0.9000 with lower interest rates a boost to the housing market. Central Banks remain the main driver of equities and currencies and a lull in bond activity has calmed markets although is this may be the precursor to the storm?

29er - Day 4, Oceanbridge Sail Auckland 2013  Richard Gladwell_©   Click Here to view large photo

Newsflash: Reserve Bank of Australia cuts the official cash rate by 0.5% to 2.5%. After the rate cut the AUD rose against the USD

Action aplenty across the markets with local news dominating for a change. The Australian election was called Sunday for September 7th and this will finally give the people a chance to select the PM! The chaotic shambles that Labor has lead Australia through has wasted a mining boom and destroyed the fiscal position and budget.

The Reserve Bank will act monetarily today by cutting rates in an attempt to stimulate a flagging economy, but it will take a 0.5% cut to impact markets. The currency has reflected the deteriorating economic and fiscal conditions, falling from 1.0600 to 0.8900 in the last couple of months. The KIWI has also had shocking news with the Fonterra botulism warning. Dairy is the major reason for NZ success in export rebuilding after the GFC and any major hits are likely to have dire effects on the local economy.

The KIWI reflected this with a break in to the 0.77's but recovered overnight to 0.7800. European markets were steady with some flat PMI data and improving economic confidence. Confidence still remains negative and EU Retail Sales contracted 0.9%. US Markets drifted lower with some good news threatening QE infinity. The ISM Non-Manufacturing Index rose to 56 from 52.2, beating expectations, throwing doubts on the continuation of QE Infintiy which was endorsed by Dallas Fed President Fisher.

Equities dipped although the Dollar was steady with the EUR 1.3250. The GBP rallied to 1.5350 after stronger PMI Services data boosted prospects. All eyes will be on the RBA in local markets and global moves will continue to be determined by Central Bank activity and the economic data that drives them.

SKUD18 in 30kts and white water - Day 4, Oceanbridge Sail Auckland 2013 -  Richard Gladwell_©   Click Here to view large photo

Collinson FX market Commentary: August 5, 2013

The big news to close the week was a miss in Non-Farm Payroll expectations. The markets were expecting 185,000 but received only 162,000, although the Unemployment rate fell to 7.4% due to falling participation. The news was not good, but the markets took it in their stride with little movement after Bernanke's reassurances earlier in the week.

The EUR traded 1.3275 and the GBP 1.5300. Central Bank support from Europe ad the US has reinvigorated equity markets and continue to inflate the bubble. Commodities drifted as demand from China contracts and economic conditions deteriorate. The AUD now broke below 0.8900 after a string of weak economic data and a massive write down in Budgetary conditions.

The Budget is now in crises and with an election looming (SEPT 7TH) it is hard to see these economic vandals being re-elected! The NZD/USD and its crosses have opened the week considerably lower, than its .7850 close on Saturday am, at .7725 as the news from the Fonterra milk powder crisis hits the airwaves....look for more volatility here as events unfold. This week will continue to be dominated by Central Banks with likely cuts from the RBA!

For more on Collinson FX and market information see:
www.collinsonfx.com and www.collinsonwealthmanagement.com

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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.


by Collinson FX

  

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11:39 PM Tue 6 Aug 2013GMT


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Related News Stories:

06 Aug 2013  Collinson FX Market Commentary: August 6, 2013 - Fonterra fallout
05 Aug 2013  Collinson FX Market Commentary: August 5, 2013 - KIWI drops
02 Aug 2013  Collinson FX Market Commentary: August 2, 2013 - ANZAC's dragged down
01 Aug 2013  Collinson FX Market Commentary: August 1, 2013 - AUD slides further
31 Jul 2013  Collinson FX Market Commentary: July 31, 2013 - Aussie takes a bath
30 Jul 2013  Collinson FX Market Commentary: July 30, 2013 - US Dollar gains
29 Jul 2013  Collinson FX Market Commentary: July 29, 2013 - KIWI Surges
26 Jul 2013  Collinson FX Market Commentary: July 26, 2013 - Jawboning the rates
25 Jul 2013  Collinson FX Market Commentary: July 25, 2013 - KIWI gives up chase
24 Jul 2013  Collinson FX Market Commentary: July 24, 2013 - KIWI looking stromg
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