Please select your home edition
Edition




Collinson FX: June 11, 2020 - Economic euphoria but significant risks remain

by Collinson FX 11 Jun 2020 06:56 PDT 30 May 2020
Wired - RNZYS Club Marine Insurance Winter Series - May 16, 2020 © Richard Gladwell / Sail-World.com

Collinson FX: June 11, 2020 - Economic euphoria but significant risks remain

The FOMC ended their two day meeting and left rates unchanged, promising continued support for the economy. The Fed predicted interest rates would remain at historical lows until at least 2020, and that it would take until then for the labour market to recover. The Fed predicted a contraction in US GDP, of 6.5%, the biggest since WW2. The headline, of this important Fed meeting, is the 'QE Infinity' will continue for the foreseeable future. Equity markets rallied on the back of this predictable outcome, as the ocean of cheap money seeks return.

The historically extreme lows in US interest rates and rising economic sentiment has allowed the Dollar to continue the safe haven retreat. The EUR rallied to 1.1400, while the GBP hit 1.2800, reflecting the Fed's monetary policy and economic confidence. Economies are re-opening across the world and this has boosted the trade exposed commodity currencies. The NZD spiked to 0.6570, following the Fed's announcement, while the AUD rallied strongly to 0.7050.

Markets are caught in a short term economic euphoria, with the re-opening of global economies, but significant risks remain. The virus is on the rise in some US States, while the China crises appears to have been relegated to the back seat, as the US copes with their internal riots and crises. China and the repercussions for the CCP's aggressive behaviour, remain the big risk to the vulnerable trade exposed economies and their currencies.

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

Countries: | NZ: 0800 338 838 | AU: 1800 143 415 | NY: 1888 6257 833 | UK: 0800 0285 834 |

Related Articles

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
Collinson FX: June 6: EU cuts rates
President Trump held an important phone conversation with Chinese President Xi. Trade wars were the market focus, once again overnight, as President Trump held an important phone conversation with Chinese President Xi. Posted on 6 Jun
Collinson FX: May 30: Trump in Court battles
Markets were shaken by the latest court order (latter upset on Appeal), in the USA. Markets were shaken by the latest court order (latter upset on Appeal), in the USA, by the US Court of International Trade. This effectively halted the Trump tariffs and was a boost to many Countries, that do not have a trade agreement with the USA Posted on 29 May
Collinson FX May 26: Trump Tariff movie hits EU
Trump's "Art of the Deal" trade wars movie gets released in Europe with a 50% opener on Sunday. Market sentiment turned negative, over the weekend, following the announcement of tariffs on the EU. President Trump announced a 50% tariff on all EU products, commencing 1st of June Posted on 26 May
Collinson FX May 22: USD down, others rise
The US Dollar weakness is a result of concerns surrounding the US economy and US growth. The EUR topped 1.1300, while the GBP broke back above 1.3400. The US Dollar weakness is a result of concerns surrounding the US economy and US growth. Moody's downgraded the US credit rating and economic data has been weak. Posted on 22 May
Collinson FX May 16: Tariffs depress inflation
Markets began to trade according to economic data releases, rather than fears held over global trade The latest US PPI was softer than expected, joining the last CPI inflation reading, confirming the tariffs have not raised inflation, but in fact the opposite. Posted on 16 May
Collinson FX May 12: US/China trade progress
The US Treasury Secretary meets, this coming weekend in Switzerland, with China. The US Treasury Secretary meets, this coming weekend in Switzerland, with China. This is the key trade agreement and progress is expected. Posted on 11 May