Collinson FX Market Commentary: June 25, 2014 - AUD up KIWI down

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Collinson FX market Commentary: June 25, 2014

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Equities were mixed again overnight but were perched at record levels due to growing economic confidence. The hand brake is the Geo-Political developing crises in the Middle East and the Ukraine. The Middle East has the ability of igniting the whole region which would be catastrophic for oil and the global economy. The Ukraine has the potential to impact an already impaired European economy.

German IFO Business Confidence slid overnight with the Dollar reversing recent losses as the EUR slipped below 1.3600. The Bank of England failed to inspire confidence and halted recent gains in the currency as the GBP slipped back to 1.6970. Housing numbers finally gave markets some hope in the US after yesterday's gains in Existing Home Sales were reinforced by New Home Sales and Home Prices. NHS leapt 18.6% and S&P prices rose 10.80%! Consumer Confidence also jumped confirming recent data.

Surprising then that equities did not continue the inexorable march upwards? The Geo-Political issues remain the threat with the disturbing GDP numbers also spreading some nerves. Philly Fed President, Plosser, observed economic targets were approaching faster than expected thus lending some support for the Dollar. The commodity currencies also slipped due to gains in the Reserve. The AUD gave up 0.9400 and the NZD slipped below 0.8700.

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Collinson FX market Commentary: June 24, 2014

Equity markets drifted off last weeks record highs with fears over Geo-Political crises undermining recent gains. Chinese Manufacturing expanded back above the all-important '50' mark, rising from 49.4 to 50.8. This boosted Asian markets and the associated commodity currencies with the AUD rallying back above 0.9400.

The NZD also managed gains supported by improving Credit Card spending boosting retail but rising interest rates should impact the consumer. The KIWI holds 0.8700. European markets fell after manufacturing and services PMI dropped lower in France, Germany and the EU. Hardly surprising for the socialist basket case that is the bureaucratic lead EU and the ECB!

The EUR traded around 1.3600, reflecting the state of the single market, while the GBP battled back to 1.7025. The gloom spread to the US with Iraq and the Ukraine both threatening global disruption. Existing Home sales rose 4.9% and manufacturing also booked gains but the wall of bad news threatens to overwhelm. All eyes remain on the the emerging crises and any major distortions in economic data releases.

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