Collinsonfx Daily Market Commentary

Oil prices continued to recover, after the spike, post-Iranian/Yemeni drone attacks on Saudi Oil facilities. Oil prices have now retreated back to $59/barrel and look to be returning to normal, despite higher tensions and possible retaliatory attacks on the Iranian regime. US/China trade talks resume on Thursday, at the 'deputy' level, with both sides appearing keen to resolve the impasse and compromise with a possible 'interim agreement'? Market fears were dissipating and with them the surging Dollar, allowing the EUR to bounce to 1.1060, while the GBP regained 1.2500.

The RBA minutes were dovish and revealed the Banks readiness to cut rates further, as required by global and domestic market conditions. This did little to boost the local currency although the macro picture and the flagging reserve allowed the AUD to regain 0.6860, while the NZD pushed back towards 0.6350. Geo-Political events and the US/China trade talks remains the major risk to markets. NZ GDP and Current account data will probably confirm a deterioration in economic conditions, although the collapse in the Dollar may assist exporters. Testing conditions lay ahead for the volatile commodity currencies.