Collinson FX Market Commentary - June 10 - Kiwi in hot pursuit of AUD

by Collinson FX on 11 Jun 2016 Collinson FX Market Commentary - June 10 - Kiwi in hot pursuit of AUD

June 10 - The RBNZ left rates unchanged with an ease bias remaining. The Central Bank is cognisant of inflation, a fear few other Central Bankers have, thereby resisting the temptation to cut rates to combat the rampant NZD. The KIWI surged on the news, to record highs for the year, challenging exports and a trade lead recovery.

The NZD jumped a big figure on the news, to trade 0.7130, consolidating in global markets overnight. There were gains against most of the cross rates, while the AUD managed to trade 0.7440, only incremental higher.

German Bond yields are at record lows, while German trade data was static, with exports and imports flat. The ECB began the corporate bond program, to extend QE, further expanding a massively bloated balance sheet. Draghi warned of 'lasting economic consequences' from years of weak growth! Global economic conditions remain fragile despite unprecedented QE. There are many, many warning signs.

Collinson FX Market Commentary - June 9 - Kiwi chasing down AUD
June 9 - Markets continued to operate in the environment created by the Fed. The shocking Non Farm Payrolls number, to close last week, has put the USD in sharp reversal. This has boosted commodity prices and currencies, while ensuring QE extension, thus boosting equity markets. The shrinking reserve has pushed the mortal EUR to 1.1390, while the JPY held below 107.00, supported by steady GDP numbers.

Chinese Trade data, revealed further deterioration, as exports fail to keep pace with rising imports. The falling reserve advanced commodity prices and the associated currencies. The AUD pushed up to 0.7470, while the NZD broke above the big, big figure of 0.7000!

The KIWI moved north despite weaker local manufacturing data and ahead of the RBNZ rate decision. The Central Bank will be sorely tempted to combat the rising currency with rate cuts, but will probably rely on rhetoric and the forlorn hope of a US rate hike.

Collinson FX Market Commentary - June 8 - Antipodean storm surge

June 8 - EU GDP was marginally higher, coming in at 1.7% p.a., beating expectations. The growth rate in the economically challenged economy has been difficult, to say the least, while the disparity is obvious. The powerhouse of Germany has dragged the retarded Med states away from stagnation. Germany has gained from the EUR, stimulating exports, through a monetarily distorted currency.

The ECB has done everything possible to win the currency wars but investments is a necessary component of growth? The Fed is using economic stagnation as an excuse to avoid committed interest rate rises. Yellen has talked the talk but walked away. She is trapped in a grotesque monetary trap. Deficit and debt have increased with cover being given by low interest rates supporting fiscal ineptitude. The Fed, ECB and other Western Central Banks are trapped. Economic growth is the only dependable in terms of economic data.

This provides the excuse Central Banks needed, to continue expansionist monetary policy, hiding fiscal ineptness.

The RBA left rates unchanged, despite temptation, with a neutral bias. The surging currency, rising to 0.7450, is being put in the hands of a Fed rate rise. The NZD has also been dragged along by antipodean confidence, moving to 0.6950, encouraged by a falling reserve.

For more on Collinson FX and market information click here and here

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

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