by Collinson FX
Collinson FX market Commentary: May 27, 2014
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The open to the week was quiet as the Americans celebrated Memorial Day. There was little in the way of economic data releases in Europe or Asia although NZ Trade data surprisingly fell, with both Imports and Exports contracting. This had little impact as initial softness in the currency was recovered during European trade. The KIWI traded 0.8550 and the AUD 0.9235. The big news overnight was the European elections which was devastating for the single market.
Voters abandoned traditional pro-European political parties and moved to the left or right. The common thread was the anti-European move, which is hardly a surprise, considering the disaster they have foisted upon member nations. The concept was excellent, on a trade basis, but the establishment of yet another level of Government and bureaucracy was not. The bureaucracy is undemocratic and unrepresentative as the seat of power moves further from the people. The imposition of mindless regulation, from upon high, and tax collection reminds many of bygone eras.
The concept of a single currency was good, but the design and implementation, was a complete failure. Fiscal unity is conceptually flawed and the problems do not end there. Fiscal consolidation relies upon uniformity and operating within boundaries. This can, clearly not, happen with a huge divergence between Southern Countries and the North. The people have voted and they have elected non-European members of a European 'Union'?!?
In the UK the Independence Party(UKIP) overwhelmed all three traditional Parties and the Right Wing Nationalist Party in France obliterated the incumbent Socialists. This mood has been building and is not likely to dissipate in National elections. The EUR was not impacted, trading 1.3650 and the GBP 1.6850. Close attention will be focused on the US markets when they re-open after the long weekend.
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