Please select your home edition
Edition




Collinson FX: Sept 19, 2018 - US/China Trade War impacts NZD

by Collinson FX 19 Sep 2018 06:28 PDT 14 September 2018
Wild Oats XI in Dent Passage heading for the finish - Hamilton Island Race Week - Day 6 © Richard Gladwell

Collinson FX: Sept 19, 2018 - US/China Trade War impacts NZD

US equity markets surged, despite the US/China trade developments, as the tariffs levied were lighter than expected. The US imposed 10% tariffs on $200 Billion on Chinese goods, rising to 25% by years end, while the Chinese response was minimal. The Chinese imposed a 10% tariff on 5,000 US goods in retaliation. Trump tweeted the Chinese plans to politically target Trump supporters with their tariffs (farmers etc) would fail, but reveals the extent of Chinese targeting rand the depth of planning in this trade dispute. The balance of trade means there can be only one winner and this is a battle over timing and dividend.

The Dollar remains soft, with the EUR progressing to 1.1670, while the GBP trades 1.3150. Australian House prices continue to contract, as discussed by the RBA in their last statement, with high debt levels and rising interest rates taking their toll. This remains a substantial threat to the Australian economy, but the easing reserve allowed the AUD to regain 0.7200, while the NZD pushed up to 0.6580. The US/China trade war directly impacts these trade exposed currencies, while NZ Consumer Confidence and Current Account data may impact the currency at the margins, today.

Collinson FX: Sept 18, 2018 - Trade war rhetoric rises

The US/China trade war continued with rhetoric rising. Key Trump financial adviser, Larry Kudlow, reiterated Trump’s dissatisfaction at the progress made, to date. Trump twittered that that the US was in a strong bargaining position, on trade, and failure to deal would result in the counterparty to be ‘Tariffed!’

Equity markets were soft, while the Dollar retreated, as EU CPI was steady around 2% p.a.. The Dollar retreated, with the EUR charging to 1.1680, while the Yen hit 112.00. Commodity currencies reacted to the flagging reserve, with the AUD pushing up to 0.7180, while the NZD traded 0.6580. These trade exposed currencies remain hostage to the China/US trade negotiations, driving uncertainty and vulnerability, awaiting an outcome. A resolution may see a substantial rebound, although continued disagreement undermines their positions, adding to recent susceptibility.

Catch the new look Collinson FX website at www.collinsonco.com

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

Related Articles

Collinson FX: Sep 11: US Fed rate cuts expected
Chinese CPI inflation was negative. They almost have deflationary problems. A US CPI inflation rate of around 2.9% or less will ensure that a Fed rate cuts is almost a certainty. China's CPI inflation was negative, easing monetary concerns. AUD and NZD both rise slightly. Posted on 11 Sep
Collinson FX: Aug 27: French Govt's woes hit Euro
European markets nosedived, triggered by the potential collapse, of another French Govt The minority Government has put the Budget up for a confidence vote, on September 8th (which is likely to fail), bringing down the Government. This was enough to poison European markets Posted on 26 Aug
Collinson FX: Aug 26: Markets and data call tune
Equity markets took profit, following the big gains booked Friday after Powell admission Equity markets took profit, following the big gains booked Friday, triggered by admissions from Fed Chair Powell that rate cuts were due. Posted on 26 Aug
Collinson FX: August 21: Bearish outlook for NZ
RBNZ cut rates 25 basis points, but the associated commentary was extremely bearish. The RBNZ cut rates 25 basis points, in line with expectations, but the associated commentary was extremely bearish. The RBNZ noted the economy was struggling and that further rates cuts were more than likely required. Posted on 20 Aug
Collinson FX: July 17: Chase for Trade Agreements
These trade dependent nations are desperate to negotiate a deal with the US Trade dependent nations are desperate to negotiate a deal with the US, but are finding it difficult, to even secure a meeting. Posted on 16 Jul
Collinson FX: July 10: "Wait and see"
This is more a ‘wait-and-see policy' than a ‘job-done', as the NZ economy remains on struggle street The RBNZ followed the lead of the RBA and left rates unchanged. This is more a ‘wait-and-see policy' than a ‘job-done', as the NZ economy remains on struggle street. Posted on 10 Jul
Collinson FX: July 1: US Equities hit record high
TheCanadian Government could not hit reverse gear fast enough, on their brand new digital tax The Canadian Government could not hit reverse gear fast enough, on their brand new digital tax, following Trump shutting down trade negotiations. Posted on 30 Jun
Collinson FX: June 27: Confidence builds in US
The US Dollar has been tumbling, as the need for a safe haven dissipates. Focus back on Trade Wars. US equity markets continued to rally as confidence builds. The US Dollar has been tumbling, as the need for a safe haven dissipates, while trade wars come back into focus. Posted on 27 Jun
Collinson FX: June 18: Markets tumble again
Markets tumbled again overnight, with the Israeli war on Iran, totally pre-occupying markets. Markets tumbled again overnight, with the Israeli war on Iran, totally pre-occupying markets. The war rages on, with devastating air attacks launched and received, from both sides. Posted on 18 Jun
Collinson FX: June 13: Xi bounces agreement
Xi bounces trade agreement that was a great deal for USA but very unfavourable to China. Reservations remain over the latest rendition of the US/China Trade Agreement. Trump announced it was a ‘done deal' and that China would pay tariffs of 55%, while the US would pay only 10%. This was not signed off in by President Xi. Posted on 14 Jun