Collinsonfx Daily Market Commentary

Daily Market Commentary

Equity markets remained under the trade war shadow, which was enlarged, after both China and the USA began the imposition of a new raft of tariffs. The share market went sharply into reverse, aided by some weak US ISM Manufacturing data, which contracted for the first time in three years. US interest rates fell, with the 10 year bond yield falling to 1.464%, which also hit the Dollar. The EUR moved up to 1.0975, while the GBP rebounded towards 1.2100, mired in Brexit fluctuations. The UK Parliament resumed and the 'remainers' attempted to take control and prevent a 'No Deal Brexit'. PM Boris Johnson responding by threatening a snap election. Labour and the Tories fear an election, due to their respective miserable standing in the polls and the only winner would be Nigel Farage. The Brexit battle resumes and continues to buffet the GBP.

The RBA left rates unchanged, as expected, allowing the currency to recover some ground. The AUD pushed back to 0.6750, aided by the weaker reserve, while the NZD regained 0.6300. The RBA did note that they stood ready to act, if economic circumstances dictated and the economy remains solid. Look to local economic data to dictate local currencies, while the Macro issue of the US/China trade war and Brexit dominate global currency direction, in terms of the Big Dollar.