Collinson FX Market Commentary- Feb 26- Regulation reduction continues

by Collinson FX on 27 Feb 2017

Luffing now - Millennium Cup and Bay of Islands Sailing Week, January 2017 Steve Western www.kingfishercharters.co.nz

Collinson FX Market Commentary - Feb 25/26- Regulation reduction continues

Feb 25/26 - Equity markets drifted off record levels to close a strong week. Trump signed an executive order on deregulation and is lining up all the ducks before congress takes over the legislative agenda. Trump is doing what is possible to curb regulation, control spending and impose current immigration laws.

The administration must now work with the Congress to pass major legislation to reform Healthcare and Tax! These are the big ones for the economy, along with deregulation, which will unleash the growth tiger. The Dollar closed the week soft, with the EUR trading 1.0550, while the Yen breaks below 112.00.

Commodity currencies took no heart from the softer reserve, with the AUD pulling back to 0.7660, while the NZD slipped back below 0.7200. The coming week is a sea of global economic data releases but will continue to be dominated by the Trump Adminstration. The President will address congress and outline his legislative goals.

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Collinson FX Market Commentary - Feb 24 - Trump turns down volume

Feb 24 - US equities continued to trade around record levels, which have been supported by the prospect of tax cuts and deregulation from the Trump administration, reflected in economic data. Fed minutes confirmed interest rate rises but were not as hawkish as expected.

The Treasury Secretary, Mnuchin, made observations overnight regarding tax that did unsettle the Dollar. Mnuchin questioned the 'border tax' and pointed out tax cuts, expected before August, would not flow through to the economy until 2018.

The EUR moved up to 1.0570, while the Yen rallied to 112.65, reflecting a soft Dollar. The weaker reserve aided the bounce in the KIWI, which jumped to 0.7225, while the AUD regained 0.7700. Political events continue to dominate equity and currency markets, while economic data is a historical confirmation, reinforcing markets.

- Millennium Cup and Bay of Islands Sailing Week, January 2017 © Steve Western www.kingfishercharters.co.nz

Collinson FX Market Commentary - Feb 23 - US equities soar

Feb 23 - Equity markets continues to trade around record highs ahead of the release of the Fed minutes. The release will confirm interest rate rises and improving economic conditions. Growth and employment are well within the desired target levels that the Fed had indicated were necessary to return to normal monetary policy.

US Existing Home Sales rose 3.3%, in line with recent data, confirming an important economic indicator. The Dollar was steady, with the EUR drifting to 1.0540, while the Yen trades around 113.59. The AUD is once again approaching 0.7700, while the NZD slipped below 0.7150, with slowing Credit Card spending. The Fed minutes should support the Dollar bull run.

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Collinson FX Market Commentary - Feb 22 - US Dollar resumes rally

Feb 22 - PMI data from Europe was mixed, with Germany improving, while France is in decline. Overall the EU has been static and the under-weighted EURO has only added to the booming exports of Germany, while lesser states from the Med, have suffered.

The EURO is currency 'manipulation in sheep clothes', allowing Germany to prosper, while others pay the price. Without fiscal/political consolidation, the single currency is debased, thus providing avenues for manipulation. The election season is upon France and Holland and may well provide the peoples answer.

The Dollar resumed the Trump rally, with the EUR falling to 1.0550, while the Yen traded 113.50. Commodities have fared well, although the rising reserve has kept the AUD below 0.7700, while the NZD has drifted back to 0.7150. NZ Dairy Prices were weak and assisted the NZRB's dialogue, in terms of currency, although the story remains the US Dollar.

Collinson FX Market Commentary - Feb 21 - Pence steadies Europe

US Vice President Pence has been reassuring the Europeans of their support for NATO and the EU, but firmly warned the Europeans over their own commitment to defence, dispelling some uncertainties.

NATO members must commit to 2% of GDP on defence, which has been paid lip service in the past, by most members. The US is in a strong position and European political turmoil has only exposed sensitivities. Strong poll showings in France and Holland have exposed growing support for Non-EU, right wing parties, which is spreading fear amongst the European elites.

News overnight of raids on LePen's (French Nationalist Party) offices have opened a new front in the battle.

US equities settled in a quiet open to a holiday weekend. The Dollar was also steady, with the EUR trading 1.0600, while the Yen held above 113.00. The AUD remained below 0.7700, while the NZD drifted below 0.7200, looking for support from the Dairy Auction.

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