Collinson FX Market Commentary- Apr 9 - AUD continues to recover

by Collinson FX on 10 Apr 2015 Collinson FX market Commentary: April 9, 2015 - AUD continues to recover

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Apr 9: Equity markets consolidated recent gains, ahead of the release of the Fed minutes, expected to show baulking from members. Economic data, lead by employment, has pointed to a weak recovery allowing a continuance of accomodative monetary policy.

The other shoe to drop is earnings in the USA. Alcoa announces after the bell, in what is the opening salvo of the earnings season, expected to be heavily impacted by the stronger Dollar and weak energy prices. The EUR dipped back below 1.0800, while the GBP pushed up to 1.4880, with corporate takeovers boosting the local market. EU Retail Sales contracted 0.2%, reflecting the mood of the consumer, in the challenged single market.

The AUD continued to recover, pushing up towards 0.7700, while the KIWI wallowed around 0.7540. Oil has given back recent gains, despite pandemonium in the Middle East, reflecting the sorry state of the energy markets. Demand globally is weak, reflecting in the economic data, leading to a continuance of excessive Central Bank liquidity and currency wars.

Collinson FX market Commentary: April 8, 2015 - Kiwi flies South

Apr 8: The Dow continued on its merry way post-Easter holidays, with big gains in equities, after some weak Jobs data allowed speculation of deferred interest rate rises. In the US this week, earnings season will kick off with Alcoa on Wednesday, along with the Fed minutes. Earnings are expected to be challenging, with a rising Dollar, impacting trade exposed companies and Energy prices hitting associated companies hard. Fed Minutes are expected to caution the economic recovery, allowing some deferred action, in the interest rate markets.

The EUR slipped back to 1.0815, while the GBP traded 1.4825, despite steady PMI data across the Eurozone. The RBA left interest rates unchanged, keeping the powder dry for a probable move next time around, givng the currency a major boost to 0.7640.

The KIWI went south, below 0.7500, exaggerating the cross looking to hit historical parity. Australian economic conditions have been testing, commodity prices have been destructive and this has directly impacted the AUD which has been decimated. The RBA Governor is looking for levels around 0.7500 and he may achieve this with further rate cuts. Volitilty remains in currency markets with Monetary strategies following economic conditions.

Collinson FX market Commentary: April 7, 2015 - ANZAC Parity?
Apr 7: Markets rallied overnight, to trade higher, in extremely thin Easter markets. Non-Farm Payrolls completely missed expectations, with 126,000 jobs added, while over 245,000 were expected. This is exactly the excuse the Fed needs to defer interest rate rises until next year! US Factory Orders gained 0.2%, reversing the previous month losses, pushing optimism up slightly.

The Dollar reacted accordingly and crashed with the EUR rising to 1.0975 and the GBP to 1.4910. The recent bath that the commodity currencies have taken have reversed. Commodity prices rallied and elicited some gains in the currency after recent turmoil.

The KIWI moved back towards 0.7600, while the AUD moved to around 0.7625, parity looking a distinct possibility. The Bank of Japan issue a Monetary Policy Statement and The Bank of England will announce rate decisions. The RBA look like they may tend to a cut this week in solidarity with Global Central Banks.

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