Collinson FX market Commentary: March 7, 2014 Click here to find out how to get CollinsonFX's free iPhone app
Tensions surrounding the Geo-Political developments in the Ukraine have overshadowed economic data during the last week. This is set to continue to dominate global markets during the coming week with no resolution likely in the short term.
Non-Farm Payrolls added 175,000, beating expectations, but this was largely ignored in equity and currency markets. The EUR held on to recent gains, trading 1.3875, with the GBP holding 1.6720. Indications are that recent economic weakness in the US, was due to the extreme winter weather conditions and may see some clear air ahead, with spring upon them.
This coming week will be totally focused on the Ukraine/Russia crises and major surprises on the global economic front would be required to influence markets. US Retail Sales and Central bank commentary may influence daily activities.
Commodity currencies fared well over the week, although an attempt at 0.9100 for the AUD, failed with the currency closing the week at 0.9050. The KIWI managed to hold gains around 0.8450 and certainly looks attractive levels to buy. Collinson FX market Commentary: March 6, 2014
Geo-Political issues continued to dominate markets with a temporary impasse covering the Ukraine.
Diplomatic attempts are being made to lure Russia back to the negotiating table with Western powers but Russia will hold fast. Crimea is lost and attempts should be made to prevent further empire expansion. Calm spread across markets with little happening in Equities and Commodities remaining high.
The EUR held 1.3740 with the GBP finding legs, rising back to 1.6740. In the US, the ADP Employment report missed expectations, with only 139,000 private sector jobs added. The ISM Services reported weaker growth although Weekly Mortgages Applications rose 9.4%.
Finally some good news from Australia, with GDP growth beating expectations, rising 2.8% annually and showing some positive signs. Exports rose and domestic consumption also found some legs giving some long awaited positives to the ailing economy. The AUD reacted accordingly, rising towards the important 0.9000 mark.
The KIWI has continued to benefit growing economic strength and a soft reserve currency enabled a break towards 0.8400.
tronger domestic data has allowed a return of confidence but Geo-Political issues will dominate global markets. Collinson FX market Commentary: March 5, 2014
Relief spread across resurgent equity markets as Putin evoked calm, reassuring many, that the Ukraine situation was not likely to explode. Putin expressed disdain for the US and their role in instigating revolution.
Blame was squarely apportioned to Western influence in a situation they do not understand. He asserted actions in the Crimea was to protect citizens and reserved the right to do so in other parts of the Ukraine.
Equities surged as Geo-Political events dominated markets and volitility will remain. The EUR was steady at 1.3730 and the GBP remained 1.6670. The RBA left rates unchanged but continued to jawbone the currency lower. The currency held fast and looks to international events and some improvement in local economic conditions to see any drive north.
The AUD traded 0.8930 with the KIWI steady on 0.8375. Geo-Political events will continue to overshadow economic events with Jobs set to dominate US markets when concerns fade. Collinson FX market Commentary: March 4, 2014
Markets were hit hard by the Geo-Political issues evolving in the Ukraine. Russia has invaded the Crimean Peninsula and confined Ukranian troops to their barracks. In new developments, overnight, Russia has demanded Ukrainian surrender of some Naval forces.
Putin is taking advantage of the internal upheaval in Kiev to annex long desired and previously owned territory. It may be that he is satisfied with the semi-Autonomous zone, but he has ambitions to expand the Russian Federation.
Markets do not appreciate the upheaval and equities plunged globally, ignoring economic data. The flight to safety reversed recent weakness in the USD with the EUR falling back to 1.3735 and the GBP slipping to 1.6660. European Manufacturing PMI was steady but this was largely ignored. US Manufacturing expanded from 51.3 to 53.2 and Personal Income and Expenditure also booked gains.
Chinese Manufacturing continued to contract undermining confidence in commodity currencies.
The AUD plunged below 0.8900 but regained some lost ground overnight, moving back to trade around 0.8900. The KIWI quietly booked gains but the resurgent Dollar pushed the NZD back to 0.8330.
Turmoil from Europe remains the dominant driver of global markets with upheaval threatening to spread. A close look at the RBA today may have an impact on the currency locally. For more on Collinson FX and market information see:
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