Collinson FX market Commentary: December 17, 2013 Click here to find out how to get CollinsonFX's free iPhone app
Equity markets rebounded strongly, after two consecutive weeks of losses, ahead of the two day FOMC meeting. The series of positive economic data releases lately have confirmed the recovery in the US and threatened the QE Infinity program. The Fed are suspected of beginning the tapering process and this has triggered the last couple of weeks of downside on equity markets, globally.
The Dollar, has regained long forgotten lustre, pushing commodities lower and the associated currencies. The AUD, has come under spectacular pressure, crashing to 0.8950 cheered on by the RBA. 'Jawboning' (and perhaps monetary intervention??) by the Central banks have assisted in the sentiment sparked by the recovery in the USD. The RBA Minutes will be released giving insight into the logic and language of the Bankers. The recent gains by the GBP have been reversed, slipping to 1.6300, with the EUR hitting the 1.3750 wall.
NZ Consumer Confidence continues to gain ground and has been reflected in the relative strength of the currency in the down markets. The KIWI holds 0.8230 and has broken above 0.9200 against the AUD. The once all-important Tankan report was released with some strong gains in the Japanese economy, although the Chinese Flash Manufacturing PMI declined, neutering any substantial momentum from Asia.
All eyes remain on the Fed and the growing belief the tapering may begin with many arguing the growing strength of the economy will counter the effect on markets.
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