Collinson FX Market Commentary - March 3 - NZD overwhelmed by Oz

by Collinson FX on 2 Mar 2016 Collinson FX Market Commentary - March 3, 2016 - NZD overwhelmed by Oz Click here to find out how to get Collinson FX's free iPhone app

Mar 3 - Equity markets were flat overnight after a big surge in the previous trading day. The ADP Jobs reported a better than expected number which allow the risk-off sentiment to continue. The Dollar staged a recovery, with the EUR holding 1.0870, while the GBP broke back above 1.4000.

The 'Brexit' concerns seem to have dissipated, GBP gains with reality dawning, leaving the quagmire. The AUD staged a dramatic surge, pushing back above 0.7250, leaving the trans-Tasman cross flailing! Australian GDP surged to a 3% annualized rate, surprising many, adding to a small rise in commodity prices.

The NZD settled above 0.6600 but was overwhelmed by the positives of the AUD. The cross rate now tests lows but has floors, allow for significant moves to continue.

Collinson FX Market Commentary - March 2, 2016 - Kiwi lifts after Dairy gain
March 2 - Equities surged overnight, risk-off trades dominated, supported by Central Banks. Economic data release was mixed, with European Manufacturing PMI coming in flat, while UK Manufacturing contracted. The Dollar was steady, booking some gains as confidence returned, reflected in the JPY moving up to 114.00.

The promise of further ECB QE undermines the EUR, which trades 1.0850, while the GBP is immersed in 'Brexit' action and holds below 1.4000. The RBA left rates unchanged, observing that global economic conditions were steady, but had room for further stimulus as required. The AUD trades around 0.7150, while the NZD regained 0.6600, after a rise in the Dairy auction prices.

Central Banks will continue to dominate equities and currencies while economic data has a daily impact. GeoPolitical events remain an existential threat to the EU, with the immigration crises threatening the very existence of the Union, while the British argue membership!

Collinson FX Market Commentary - March 1, 2016 - NZ rate drop?
March 1 - Equity markets were steady, to open the week, as Oil prices consolidated. Much of the action focused around anticipated Central Bank action. EU CPI contracted 0.2%, reflecting the failed growth prospects in a zone which is under siege from a flood of refugees. The lack of inflation has led to further speculation of extended QE from the ECB, pushing the EUR back to 1.0875.

The GBP held ground around 1.3900, after a destructive week, undermined by the EC Membership referendum.
Similarly in NZ, inflation fell, leaving room for a rate cut by the RBNZ. This put downward pressure on the NZD which dropped below 0.6600. The AUD awaits the outcome of todays RBA decision, expectations are for a hold on 2%, but commentary may determine the direction of the currency. The AUD trades 0.7140 in anticipation.

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