Collinson Forex Daily Market Commentary

Daily Market Commentary

Asian markets await a big announcement from the Chinese Housing Minister, which will supposedly address the housing crises, following fiscal stimulus announcements over the last weekend. These Governmental steps to address problems within the Chinese economy, are not only welcome but necessary. Chinese markets have experienced extreme volatility over the last couple of weeks, in an extremely significant period of economic change. Global demand has been weaker and trade sanctions and tariffs are increasing. UK inflation crashed to 1.7%, from 2.2%, indicating cuts are coming, from the Bank of England. This led the GBP lower, plunging below 1.3000, while the EUR slipped to 1.0860.

The rising reserve impacted the commodity currencies, with the AUD falling to 0.6660, while the NZD drifted back to lows of 0.6040. The weakness in the NZD was expected, following the big falls in the NZ inflation rate, in the latest quarterly reading. The headline CPI fell from 3.3%, all the way down to 2.2%, which was increasingly foreseen by the RBNZ. The Central bank has seen the inflation contributors moving sharply lower, for some time, which has triggered the urgency in recent rate cuts. There will be a lot of criticism that he has acted far too late, allowing recessionary economic conditions to extend and prevail in NZ and forcing 'higher for longer' interest rates on the consumer.

Paul Bettany   I   Collinson Forex Limited    Collinson & Co.  

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