Collinson FX Market Commentary- August 16 2014 - Mixed message at end
by Collinson FX on 17 Aug 2014
Collinson FX market Commentary: August 16, 2014
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Day 5, 2014 Toyota Optimist Championships, Manly SC © Richard Gladwell www.photosport.co.nz
The week closed with mixed markets as pundits tried to decipher the flow of Geo-Political information from the crises zones. Iraq seems to be moving in the right direction with the election of a more acceptable leader in Baghdad and the IS being controlled in the north by the US backed Kurds. A ceasefire in Gaza has been extended and appears to be holding while negotiations continue.
The hot-spot appears to be the Ukraine, with Govt forces claiming the partial destruction of a Russian military convoy, inside the disputed Eastern Ukraine. Russia has described this as fantasy, while they await the massive aid convoy, due to enter the Ukraine through rebel held territory. Plenty of triggers waiting to be pulled in the coming few days!
The EUR moved back towards 1.3400 while the GBP tried to break back above 1.6700. US Confidence fell and mixed manufacturing data did little to inspire the US markets, as they continue to look towards Geo-Political issues, to give direction. The coming week will continue to be dominated by these issues while the US will look at housing and inflation.
The Europeans release PMI data, pertaining to Manufacturing, Services and Composite, which should further clarify the parlous state of the Zone. The AUD took advantage of the respite globally and consolidated above 0.9300 while the KIWI crept back towards 0.8500.
Collinson FX market Commentary: August 15, 2014
Geo-Political threats subsided overnight, helping to assist equities into positive ground across Europe and the US despite disturbing economic data. The German economy contracted for the quarter while the French fell flat. The impact was to drive any growth from the Zone which confirms a long and entrenched trend.
The German situation is a more worrying development as this has been the only support for a Europe-wide dysfunction. The EUR remained steady, trading 1.3360, while Bond yields slipped anticipating further ECB intervention.
In the US, Weekly Jobless Claims rose and the bad news reinforced Central Bank stimulus expectations.
The AUD managed to consolidate a little over 0.9300 while the NZD rallied to around 0.8485. Global crises will continue to drive the markets to close the week.
Collinson FX market Commentary: August 14, 2014
Equities surged again overnight, with Retail Sales stagnating, giving cover to the Fed to defer any considered interest rate rises. Inflation and growth may have suggested an end to QE Infinity and a tightening monetary policy, but a fall in consumer demand, will provide cover for Yellens natural dovish instincts.
The Dollar was steady, with the EUR trading 1.3360, while the GBP slipped below 1.6700 despite dovish statements from the Bank of England.
Australian Consumer Confidence jumped 3.8%, reversing recent trends on the economic front, giving support to the local currency which rose to test 0.9300. The KIWI was quiet and holding around 0.8450.
Collinson FX market Commentary: August 13, 2014
Stocks retraced any gains with little on the economic front to support the bull markets. The Dollar remained an attractive target with the EUR 1.3370 and the GBP 1.6815.
Economic developments were few and far between and the Geo-political concerns dissipated allowing some confidence to return. The Russians bide their time while awaiting the opportunity for further developments globally to shadow their humanitarian invasion.
The NZD remained bid with the interest rate differential remaining attractive around 0.8440. Australian business confidence rose as did house prices but this did little to assist the currency with the AUD 0.9275.
Collinson FX market Commentary: August 12, 2014
The rebound in equities continued to begin the new week amongst light economic data releases. With little to drive the markets on the economic front Geo-Political issues become front and center.
The Dollar stabilized, with threats on multiple fronts, the EUR trading 1.3385 and the GBP 1.6790.
NZ Credit Card spending was dead, which is a further reflection of the impact Monetary Policy is having on the economy.
The KIWI remains supported by interest rate differentials trading 0.8450 while the AUD drifted back to 0.9260.
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