Collinson FX Market Commentary- Jan 22 - Alarm clock wakes up Kiwi

by Collinson FX on 22 Jan 2015 Collinson FX market Commentary: January 22, 2015

http://itunes.apple.com/app/collinsonfx/id533360650?mt=8!Click_here to find out how to get CollinsonFX's free iPhone app

Jan 22 - The NZD and AUD fell out of bed overnight as the realisation dawns on Central Banks there is little growth and falling inflation. The Bank of Canada surprised markets and cut interest rates citing low inflation and decimated Oil prices. This caught an already nervous market by surprise and jolted commodity currencies. The AUDUSD fell to 0.8075, while the KIWI plummeted to 0.7560, aided by local CPI data.

NZ CPI contracted 0.2% for the last quarter, setting off the currency collapse. The Bank of England has halted the indicative rises while the ECB is set to announce a massive QE tonight. Lack of global growth and the collapse in demand has resulted in the commodity price war. The RBA has indicated future cuts while the RBNZ needs to act quickly and reverse previous ineptitude.

The NZD currently trades 0.6520 and 0.4990 against the EUR and GBP. The NZDJPY fell below 90.00 overnight and continued to decline, barely holding 89.00 this morning. The decline the the NZD and AUD negated the effects on the NZDAUD cross, trading 0.9340 this morning, little changed from yesterdays levels.

Collinson FX market Commentary: January 21, 2015

Jan 21 - European equities rallied overnight, for all the wrong reasons. Haven't we seen this movie? The US has flushed the markets with liquidity, since the GFC, giving equity markets the biggest monetary boost in history. The ECB plans to do the same and flood the markets with cheap money in an effort to stimulate.

The only problem is the fundamental dysfunction of the single market. The basis of the Union is flawed and the concept is broken. The Dollar resumed the inexorable rise as the trend strengthens. The EUR slipped to 1.1550, while the GBP dropped to 1.5150, The IMF reviewed global growth forecasts lower to 3.5%, from 3.8%. Chinese growth was steady at 7.3%, but a shadow of it's former self, as leaders consolidate wealth distribution.

Commodities were not bedazzled by the insipid performance and associated currencies reacted accordingly. The AUDUSD dropped back to 0.8150, while the NZD dropped back to 0.7650, with CPI confirming the absence of growth. NZ Monetary Policy has a lot to do with the economic pickle. Dairy prices remain under pressure, exposing local dependence on this sector.

Economic conditions continue to deteriorate globally and this will be confirmed statistically. The NZD currently trades 0.6622 and 0.5040 against the EUR and GBP and has fallen bellow 91.00 against the Yen. The biggest loser overnight was the NZDAUD cross, which continued its decline from dizzy heights to trade 0.9350 this morning.

Collinson FX market Commentary: January 20, 2015

Jan 20 - Markets were slow, calm and steady overnight due to MLK holidays taken by US markets. This allowed speculation on European markets about the timing and magnitude of the ECB's QE. Massive expansion of liquidity is expected, which boosted equity markets, but undermine the currency.

German exports will be a beneficiary but higher import costs and wealth destruction will hurt the European citizens. The EUR traded 1.1600, while the GBP managed to hold above 1.5100, supported by low volume, inactive markets. Commodity currencies tread water, with the AUDUSD scrambling to hold 0.8200, while the KIWI moves to 0.7760 with glowing economic prospects according to the PM!

Markets will resume overnight after the long weekend in the US so expect action and perhaps a dose of reality. The NZD currently trades 0.6670 and 0.5125 against the EUR and GBP.

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

Countries: | NZ: 0800 338 838 | AU: 1800 143 415 | NY: 1888 6257 833 | UK: 0800 0285 834 |

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.