Collinson FX Market Commentary- November 6 - Aussie falls out of bed

by Collinson FX on 6 Nov 2014 Collinson FX market Commentary: November 6, 2014

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Nov 6 - The AUD fell out of bed overnight with a conflation of deteriorating issues. Commodities have been hit hard over the last year and iron ore and coal prices determine the extent of the countries economic performance. The recent surge in the 'Big Dollar' has exasperated the situation in the extreme. This has forced commodities lower and pushed the reserve higher to double the pain for the currency. Overnight the Dollar surged pushing the AUD to 52 week low and driving commodities lower.

The AUDUSD fell back to trade 0.8550 dragging the KIWI back towards 0.7700. The Mid Term US elections were a wave victory for the Republicans which should be a shot in the arm for the economy. This boosted energy companies with many expecting this to be a major target for the Conservatives. European markets rallied, with slightly improved Composite PMI and the prospect of further intervention, when the ECB meets tonight. The EUR fell to 1.2470 while the GBP drifted to 1.5970 with the rising Dollar.

The Yen was also a major victim, hitting 114.80, after the BOJ iterated there ' was no limit to the steps the Central Bank may take'! Volatile markets are set to continue with big moves in currencies and commodities with the cloud of Geopolitical crises hanging. The NZD Currently trades down against the European pair, 0.6160 and 0.4810 against the EUR and GBP. The winner again today was the NZDJPY which currently trades 88.20.

Collinson FX market Commentary: November 4, 2014
Nov 4 - Markets remained confident ahead of the US Mid-term elections tonight. October has been unusually kind to investors after suffering an 'almost correction' in September. The ISM reported improving manufacturing conditions and this was confirmed with steady PMI Manufacturing data.

The US is bullish heading in to the big elections expected to be a huge win for the Republicans and a blow to the Democrats. European Manufacturing data was weak but steady while Chinese Manufacturing came in at 50.8, lower than expected, but remained in positive expansionary territory.

The completion of QE has reinvigorated the Dollar, with the EUR now trading 1.2475, while the GBP slipped to 1.5975. All eyes in the US were focused on the Mid-Term Elections but the Australian markets have the RBA decision which will be overshadowed by the running of the 'Great Race' ... the Melbourne Cup! Australian Commodity prices continue to wallow while Building Applications have collapsed.

The economy is not experiencing much in the way of positives and the AUD is reflecting that, trading below 0.8700. The KIWI has been plagued by Central Bank interventionism, impacted by the rising cost of capital, in the form of rising interest rates. The NZD trades around 0.7700. Look at Central bank policy and 'speak' while US Jobs reports will influence markets this week with a caveat for developing Geo Political issues.

The NZD currently trades 0.6160 and 0.4810 against the EUR and GBP, down on previous day. The NZDJPY remains strong, testing 88.00 overnight before subsiding to 87.60 this morning, good buying.

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