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Collinson FX Market Commentary - Feb 17 - Bullish markets in US

by Collinson FX on 17 Feb 2017
- Millennium Cup and Bay of Islands Sailing Week, January 2017 Steve Western
Collinson FX Market Commentary - Feb 17 - Bullish markets in US

Markets took a breather overnight, with equities and the Dollar settling after a surge this week, supported by economic data and sentiment. Janet Yellen has indicated the Fed will be raising rates this year, sooner rather than later, due to strong growth in employment and inflation.

Economic data is now following sentiment, with the Philly Fed survey exploding, surging to 43.3 from 23.6. The Trump administration has promised cuts in tax and regulation, which is red meat to markets, with economic data starting to move with the positive sentiment. The Dollar took a breather, with the EUR jumping to 1.0660, while the Yen hit 113.30.

Australian Employment data was mixed, with Unemployment falling to 5.7%, but this was tempered by a fall in full time employment. The AUD was softened by the news, slipping below 0.7700, while the NZD jumped to 0.7225. Markets are very bullish and this is likely to continue, although action must follow rhetoric in the US.

Collinson FX Market Commentary - Feb 16 - Markets have a gay day

The market rally continued with gay abandon, while Trump met with BB Netanyahu at the White House, turning his attention to a peace solution in the Middle East. He also found time to meet with Retailers, for the first time, which was welcomed with a strong rally in Retail Sales.

Retail Sales jumped 0.4%, while the CPI signalled strong inflation/growth, rising 0.6%. The controversy surrounding the resignation of the National Security Adviser, General Flynn, was swamped with new events in Washington. The Dollar settled, with the EUR holding below 1.0600, while the GBP traded 1.2450, unassisted by static employment data.

Commodity currencies eked out some gains, supported by strong data from China, with the AUD looking at 0.7700, while the NZD jumped to 0.7200. Global data will continue to drive minor currency moves, while Yellen confirms rising rates will support the ebullient Dollar, all living in the new Trump world!

Collinson FX Market Commentary - Feb 15 - US touts interest rate rise

Fed President Yellen made her bi-annual appearance in front of congress informing them of expected rate rises during the current year. She cited growth and inflation as the reason for interest rate rises and that it would be wise to address them sooner rather than later.

This supported the Dollar, with the EUR slipping to 1.0560, while the Yen traded 114.30. German GDP and CPI data was steady, but hardly inspirational, from the EU engine room. UK CPI contracted 0.5%, while the annualised number remained steady, unsettling the resurgent currency (1.2460). A rise in Australian business conditions allowed the AUD to approach 0.7700, during local trade, but Yellen's testimony put paid to the rally.

The AUD slipped back to 0.7640, while the NZD dipped below 0.7150, also hit by a bullish reserve. The wealth of economic data will impact individual currencies while underlying currency moves continue to be dominated by the Dollar.

Collinson FX Market Commentary - Feb 14 - All want a trade deal with US

Feb 14 - The European Commission released their latest forecasts, upgrading the UK post-Brexit, admitting the doomsday scenarios were over done. The forecasts were more optimistic, globally, although did recognise the impact Brexit is having on the European Union. US Equity markets rallied strongly, still running on the 'phenomenal' tax package and growing confidence surrounding trade.

No sooner had the Trump administration finished successful talks with Japan, Canada has arrived, with high hopes. Bi-lateral trade is the most advantageous for the US to move forward on fair trade. This allows accountability and fairness within the framework, which had been ameliorated in the multi-lateral versions.

Yellen testifies in front of congress tomorrow, which is likely to reveal bullish sentiments, despite a contentious relationship with the new administration. The Dollar continued to reflect this, with the EUR dropping below 1.0600, while the GBP held 1.2500.

The AUD has been resilient and trades around 0.7640, while the NZD suffer last weeks wounds, drifting to 0.7150. Look to Yellen and Trump to dominate markets, over the next couple of days, while a plethora of economic data will insure plenty of activity.

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