Collinson FX: August 22, 2018 - NZD continues to rise

Triton (Lyons 60) - David Gotze (VIC) -Hamilton Island Race Week - Day 2 © Richard Gladwell

Collinson FX: August 22, 2018 - NZD continues to rise

The Dollar reversed recent gains, interrupting a bull-run, driven by strong growth and tightening monetary policy. Trump has been out criticising the interest rate rises, pressuring the Fed, who had planned to raise rates in September and December. The political pressure may have an effect, allowing low rates to fuel growth, only time will tell?

Equities continue to rally strongly, with the S&P hitting record highs, driven by growth and earnings. The market confidence is soaring, allowing risk-on trading, while trade developments have been positive and progressive. The attack on the Feds monetary policy has resulted in an easing of the Dollar, with the EUR spiking to 1.1580, while the GBP jumped above 1.2900.

The RBA minutes were positive, confirming healthy growth in the economy and employment, while effects on the Dollar were offset with political diversions. PM Turnbull survived a challenge to his leadership, by Home Affairs Minister Peter Dutton, who looks set for a more successful second strike. The softer reserve allowed the AUD to trade 0.7370, while the NZD approaches 0.6700.

Central Bank rhetoric and speculation ahead of Jackson Hole, Trade developments and economic data will continue to drive markets.

Sun and spray - Black Jack bow - Hamilton Island Race Week - Day 2 - photo © Richard Gladwell

Collinson FX: August 21, 2018 - NZD lifts on Aussie woes

Equity markets surged towards record highs, with the prospect of closure to global trade wars, as a China/USA summit in November looms.

Trump has ‘verballed’ the Fed, imposing his expectations upon Powell, to keep rates low. Trump wants to keep interest rates as low as possible, to allow capital investment to flourish, adding fuel to the boom market. This is ahead of Central Bankers meeting at Jackson Hole. The environment at this meeting will be improving, with global moves tending towards rising rates and growth, rather than expansive monetary policy.

The Dollar eased slightly, with the EUR trading 1.1460, while the GBP pushed towards 1.2800. The Australian market was consumed with political intrigue, once again, with pressures mounting on PM Turnbull. Once again climate change may claim another Prime Ministerial scalp. His NEG energy policy has incensed the conservatives in his party, forcing a retreat, while crippling polls may be enough to topple the Liberal leader? The AUD held steady at 0.7320, supported by the softer reserve, while the NZD pushed up to 0.6625.

The Liberal/National coalition parties meet today and fireworks are expected. A change to Peter Dutton may even be greeted positively by markets!?

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