Collinson FX market Commentary: March 27, 2014 Click here to find out how to get CollinsonFX's free iPhone app
Equity markets slipped lower overnight, as Obama tours Europe warning Europeans to act strongly against Russian actions in the Ukraine.There is a lot of pressure on the West to stand up to Putin but their hands are tied, militarily,and economic sanctions would be an act of self-harm.
Speculation surrounding the Fed's tapering program was again tested as St Louis Fed President, Bullard, refused to name a date the QE stimulus would come to an end. The EUR moved back to 1.3780 and the GBP to 1.6550. Durable Goods Orders in the US rose, boosting confidence, although this failed to harm the negative impact of Geo-Political developments in Europe.
The AUD has undergone a renaissance recently with domestic economic data on the improve and the expected resurgent Dollar not eventuating. A break above 0.9200 has seen a stern test of the downward trend-line and looks likely to continue unless the Fed support a resurgent Big Dollar. The KIWI rallied to just under 0.8600, having a good look at Exports and Imports, with today's release of trade data. Short term currencies moves can be driven by local economic data and fundamentals matter long term but Geo-Political events and the Fed's Monetary Policy overwhelm these drivers. Collinson FX market Commentary: March 26, 2014
A lull in developments in the Ukraine has led to a recovery in Equities reinforced by a rise in US Consumer Confidence. There were no new advancements in the Crimean sphere of activity with consolidation allowing some breathing space. US Consumer Confidence jumped to 82.3, from 78.3, perhaps signalling a spring rally.
The EUR was flat, trading around 1.3850, with the GBP 1.6530. Commodities continued to climb and confidence returned to associated currencies as the AUD rose to 0.9150 and the KIWI to 0.8560.
Risk appetite has returned, as the new status quo is embedded across Europe, allowing markets to follow trends. Domestic economic activity has talked a back seat recently but further US Housing Data and GDP growth numbers may have a impact on daily markets. The Geo-Political situation in Europe will impact markets as a new world order emerges in Europe. Collinson FX market Commentary: March 25, 2014
Equities opened the new week lower with Europe simmering and economic conditions globally weaker. China Flash Manufacturing PMI revealed a slower manufacturing sector in the worlds factory. European Manufacturing PMI was lower in Germany and the EU, with Manufacturing and Services both falling, although France bucked the trend.
The Chicago National Activity Index improved, but remains slow, with the emergence from a nasty winter. This week will focus on US GDP growth and Housing data to provide domestic drivers to equities and currencies. The lack of confidence has lead to a weaker USD as the EUR jumped to 1.3860 and the GBP 1.6520. Risk sentiment has improved with Russia consolidating the Crimea and the West talking a lot.
Commodity currencies thrive on improved risk sentiment and the AUD again broke above 0.9100 and the KIWI 0.8540 in overnight market. Economic data from the US and Geo-Political developments from Europe will again dominate markets for the week For more on Collinson FX and market information see:
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