Collinson Forex Daily Market Commentary and Weekly Market Calendar

Daily Market Commentary

Calm returned to markets Friday, to close out a week of turmoil, but raw nerves remain. Attention in the coming week will be focused on growth and inflation, across Europe and the USA, as fears over looming US recession remain. Europe is and has been in a recession for some time and the ECB was first to react, cutting interest rates ahead of the Fed and Bank of England. The result has been a spike in inflation, which serves as a warning to the Fed. The causes of inflation in the US and Europe remain. High energy prices and money printing to fund deficit spending and debt. The USD remain steady, with the EUR trading around 1.0900, while the GBP hit 1.2750.

Commodity currencies have shown some resilience, with the AUD pushing back towards 0.6600, while the NZD looks to regain 0.6000. The RBNZ meets this week, to determine interest rates, and look set to leave rates unchanged. There is a recent 'dovish tone' to the NZ Central Bank and if this continues, it may undermine the recent rally in the currency. Market focus will be on US growth, possible recession and Geo-Politics in the Middle East.