Collinson Forex Daily Market Commentary

Daily Market Commentary

A subdued start to the trading week as US Markets were closed for the Presidents Day holiday. Markets are reflecting upon the new 'Reciprocal Tariffs' that the Trump administration has now instituted. These will be at least seen as a balance, although many of the existing tariffs that US trading partners have been allowed, are under long held historical trade agreements. No more, and this will shock many trading partners in Europe and more especially India. The EUR drifted off the 1.0500 mark, while the GBP held on to the 1.2600 level.

Japanese Q4 GDP growth surprised many, surging to 2.8%, beating almost all forecasts. The Japanese Industrial Production also jumped by 1.6%. Attention in local markets will turn to Central Banks, with decisions from the RBA, PBoC and RBNZ this week. The 'big one' is predicted to be the RBA, who have held out on interest rate cuts, while those around them have embraced the lower interest rate cycle. The RBA has seen stubborn inflation throughout the last few years and have resisted pressure to cut, fearful of the huge Government fiscal deficits and debt. The RBA is expected to buckle and begin to cut rates, while the RBNZ will continue rate cuts, as recessionary economic conditions demand. The AUD is trading on highs, above 0.6350, while the NZD has consolidated above 0.5700.

Paul Bettany   I   Collinson Forex Limited    Collinson & Co.  

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