Collinson FX: June 21 - NZD drops further
by Collinson FX 21 Jun 2018 07:00 PDT
22 June 2018
Oceanbridge NZL Sailing Regatta, Day 3, February 5, 2018, Murrays Bay SC © Richard Gladwell
Collinson FX: June 21 - NZD drops further
Trade continues to dominate markets overnight. The new developments came from Europe, Germany in particular, with talk of an agreement on cars. The US Ambassador to Germany has been renegotiating the trade agreement to rebalance the massive US deficit. The agreement is over abandoning all tariffs on cars, between the US and Germany, with a view to a real 'Free Trade' zone covering all Industrial Products. This has been some positive news after the China/US fallout.
The EUR was steady, trading 1.1580, as was the GBP, which was holding below 1.3200. US Existing Home Sales contracted 0.4%, but this was largely ignored, after healthy rises in Building Permits and Housing Starts. The Global Trade impasse has had a dramatic impact on trade exposed countries, headlined by the commodity exporters, Australia and New Zealand. The AUD fell back to 0.7350, while the NZD dropped to 0.6850, ahead of today's important GDP numbers. NZ GDP is expected to come in around 2.7%, lower than the previous 2.9%, but any surprise would disturb an already volatile currency.
Collinson FX: June 20 - Chinese markets slump
Chinese markets slumped overnight, leading global markets lower, after the 'trade war' between China and the USA reached new levels. Trump has asked for a 10% tariff to be levied on an additional $200 Billion in Chinese goods, in response to the retaliatory tariffs China imposed on US goods, which were in response to the original US tariffs on Tech and IP sanctions. The war is heating up and global markets suffer, especially heavily trade exposed countries, such as Australia and NZ.
The AUD fell to 0.7370, while the NZD slipped below 0.6900, looking extremely vulnerable. The commodity currencies are heavily dependent upon exports and the trade wars are a spear to the heart. The EUR traded 1.1570, ahead of a European leaders summit, which promises to be extremely important. The EU is under extreme pressure internally and is being torn asunder over the immigration issue. To add to their woes, the US is imposing sanctions to address trade imbalances, which threatens the engine of the EU...Germany.
US Housing Starts and Building Permits both posted solid gains of 5%, reflecting the strong economy, but trade wars are a threat. This is a global problem and has hit all markets hard. The US is the instigator of this war, but because they are running massive trade deficits, they are in a strong bargaining position.
Collinson FX: June 19 - NZ data due
A shortage of substantial economic data releases overnight, allowed markets to re-focus on the looming trade war, specifically with regards China and the USA. The US imposed tariffs on China, $50 Billion in relation to Tech and IP theft, with the aim to reduce this. The Chinese have indicated retaliatory action, although the Americans have warned against this response, threatening to raise the ante!
The EUR pushed back above 1.1600, while the GBP traded 1.3240, amidst further 'Brexit' pressures. The AUD slipped back towards 0.7400, while the NZD traded 0.6925, ahead of important trade and growth numbers later in the week. Commodity currencies are very vulnerable to any escalation in trade wars, as they are very trade dependent, thus increasing the impact to the domestic economies. Trade will play a major role in markets, especially when there is a dearth of substantial global economic data, although global events overtake the narrative quickly.
Disclaimer: The details expressed in this website and accompanying documents or transmissions are for information purposes only and are not intended as a solicitation for funds or a recommendation to trade. Collinson Forex Ltd accepts no liability whatsoever for any loss or damages suffered through any act or omission taken as a result of reading or interpreting any of the information contained or related to this site
For more on Collinson FX the latest update click here now
Countries: | NZ: 0800 338 838 | AU: 1800 143 415 | NY: 1888 6257 833 | UK: 0800 0285 834 |