Collinson FX Market Commentary - June 29 - NZD up, then back down

by Collinson FX on 30 Jun 2017 Collinson FX Market Commentary - June 29 - NZD up, then back down

Equities turned negative overnight as tech stocks dragged US markets lower. The US needs legislative action to solidify the anticipated tax reforms that have sparked much of the rallies markets have enjoyed. The Dollar continued to tumble, as markets see recovery in the European economy and anticipate some action from the ECB and Bank of England.

The EUR moved up to 1.1430, while the GBP approached 1.3000, with pressure on the Cemtral Bank to act. The reserve weakness has allowed the AUD to rally throughout the week, nearing 0.7700, while the KIWI has languished.

The NZD briefly breeched the ceiling of 0.7300, after local Business Confidence came in stronger than expected, but slipped back below 0.7300 in overnight trade. Central Bank speculation has assumed market dominance in a quiet week for economic data releases.

Collinson FX Market Commentary - June 28 - AUD jumps as USD stumbles

The Dollar took a bath overnight after the ECB commentary was digested and regurgitated. The commentary was initially bullish the European economy and indicated a recalibration of monetary policy but was redefined to temper the language to a more dovish interpretation.

This initially brought the EUR below 1.1300 but a wave of negative Dollar sentiment engulfed currency markets. The EUR surged to 1.1380, while the GBP jumped to 1.2925, as the Dollar stumbled.

The AUD embraced the impact of the flagging reserve, jumping to 0.7630, although the NZD failed to break 0.7300!?

Equity markets surged with confidence as markets interpret Central Bank commentary.

Collinson FX Market Commentary - June 27 - EURO jumps overnight

The EURO was the big mover overnight, boosted by a bullish outlook from ECB President Draghi, who outlined a 'strengthening and broadening recovery in the zone' . He reiterated his position on extremely loose monetary policy, confirming it would continue, but signalled he would adjust as necessary.

The EUR spiked to 1.1325, with the threat to QE, dragging the GBP toward 1.2800. US Consumer Confidence rose, while S&P Case Shiller Home Price Index improved 5.5%, in line with other recent positive housing data. Yellen is due to make a public address today, so there may be some push back on the EUR.

Commodity currencies remain in cruise control, with the AUD below 0.7600, while the NZD failed to bust 0.7300. With light global economic data releases markets are concentrating on Central Bank speculation.

Collinson FX Market Commentary - June 23 - KIWI overvalued

The markets closed a quiet week meekly after disappointing PMI data from the EU.

The EU Manufacturing and Services PMI both drifted lower. Recent data has been negative after what looked like a building recovery. US PMI was also lower and these weak numbers provide a reason for flagging energy demand and associated prices.

The EUR approaches 1.1200, while the GBP moved back to 1.2725, reflecting a softer Dollar. Commodity prices have been weak, but the drifting reserve, enabled the AUD to trade 0.7570.

The fallout from the RBNZ meeting continues with the KIWI heading towards 0.7300!

The currency is overvalued as headline economic data camouflages the underlying problems. The economy is underpinned by immigration and heavily dependent on traditional primary exports.

Collinson FX Market Commentary - June 20 - Fresh start in Europe

The French Parliamentary elections confirmed a majority for the new President. Macron has been a revelation with a new political party sweeping aside the traditional left and right parties.

A fresh start in Europe has allowed markets some optimism and equities gained ground. In the US, New York Fed President Dudley, had a positive view of the US economy. He talked up growth prospects and the return to normal monetary policy. This supported the Dollar, with the EUR slipping back to 1.1150, while the GBP drifted to 1.2730.

Australian New Vehicle Sales were positive but the rising reserve pushed the AUD below 0.7600, while the NZD settled just above 0.7200. Local markets will be keenly awaiting the release of the RBA minutes and the Central Banks view of current economic click here and here Or for the latest update click here

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