Collinson FX Market Commentary - June 30 - Calm heads lead recovery
by Collinson FX on 30 Jun 2016
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Collinson FX Market Commentary - June 30 - Calm heads lead recovery
June 30 - Markets are regaining sanity with the return of reason. The Brexit has not changed anything , other than intention and sentiment, until the Brexit process begins. The Dollar retreated and risk appetite filtered through global equity markets. The EU summit closed with leaders calling for an orderly exit as quickly as possible.
There is no reason that this process of negotiations will not commence in a sober fashion and be conducted systematically with a good result for all. The major problem will be access to EU markets, which will not be given easily, so as to discourage further recalcitrants.
The problem the EU have is that the UK is a major trading partner to many members. The U.K. will focus on alternative markets, with Commonwealth members lining up at the door, restoring historical trade links.
The EU have failed to enact any substantial trade agreements globally, with negotiation of bureaucrats taking years, stalling market expansion. This has been one of the main problems of a protectionist Union and now Britain will be free!
The confidence in markets was reflected in the sliding Dollar which boosted commodities and associated currencies. The NZD jumped back towards 0.7100, while the AUD traded 0.7420, with Oil breaking back to $50/barrel. The GBP has recovered, to trade 1.3450, while the EUR regained 1.1110. Calmer heads are prevailing.
Collinson FX Market Commentary - June 29 - Dust settles on Brexit
June 29 - The dust is starting to settle post Brexit. Equity markets are regaining some lustre as reality dawns. The British PM met with European leaders, bring a certain reality home, while warning of an amicable divorce. Markets are looking for certainty and confidence, while the Dollar charges on.
The EUR is reflecting the state of play, falling to 1.0900, while the GBP recovered to 1.3350. Commodities also recovered, dragging the associated currencies, with the AUD approaching 0.7400 once again.
The KIWI shows some stability, consolidating above 0.7000, a reflection of a settling Dollar. Reality is dawning in Europe, and the real victim is the insoluble EC!
Collinson FX Market Commentary - June 28 - Europe bleeds post-Brexit
June 28 - The fallout from the Brexit vote continues unflinchingly. S&P double downgraded the UK from, AAA to AA, as telegraphed. This was no shock and only joined Fitch and Moody's. This was after the UK equity market close, but impacted the currency, with the GBP hitting new lows of 1.3180.
The EUR held steady on 1.1000, despite safety flows to the USD and Yen. European equities continue to haemorrhage, suggesting the Brexit may impact the EU more than the UK, shedding almost 12% in the two post Brexit fallout. The FTSE has only dropped 6% since the poll, while US markets even less, with risk of further exits in the offing.
The Bank of England stands ready for any required interventions to stabilise markets, while the Chinese opted for a further cuts, as the Japanese PM has ordered the Bank of Japan to monitor closely. Commodities have fallen, hit by the surging Dollar, thus impacting the associated currencies. The NZD fell below the big, big figure, to trade 0.6980, while the AUD eased to 0.7330. The turmoil is far from over as markets look for stability and certainty in a world of confusion!
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