Please select your home edition
Edition app (top)

Collinson FX: Aug 7 - The world needs Trump to succeed

by Collinson FX 6 Aug 19:07 BST 7 August 2019

Collinson FX: August 7, 2019 - The world needs Trump to succeed

Markets rebounded strongly, after the savaging on the previous day's trade. The US/China trade war is the genesis of the market upheaval, but the cold calm evaluation of the situation, would reveal a hint of desperation from the Chinese. The Chinese have exploited their position in global trade since their much vaunted inclusion in the WTO many years ago, making every post a winner. The exploitation of preferential trade terms and the constant and enormous industrial level IP theft, have enabled the Chinese to become the second biggest economy in the world. Donald Trump is determined to halt the international criminal activity and balance the trade book. The Chinese are resisting but many are beginning to realise the necessity of Trump's actions. The world needs Trump to succeed.

US Equities roared back, after the Chinese central Bank allowed the Yuan to regain some strength. The word was that China had banned US agricultural imports, but that reeks of desperation, in the US/China trade war. The Chinese have exhausted trade means and have resorted to banning US imports. This only highlights the powerful position the US is in, in these trade negotiations. They have a deficit of $500 Billion and can extend and increase tariff levels, at any time, only adding to the immense pressure the Chinese are under. Any attempt to ban US agriculture exports is desperation. They may be at the end of their tether and close to surrender?

The EUR rallied back to 1.1200, while the Yen slipped back to 106.50. The Dollar has become popular again, despite the continued fall in the US bond yields. The 10 year Bond Yield has collapsed to 1.72%. The RBNZ is expected to cut rates today and offer a dovish bias to monetary policy. The NZ Employment data, released yesterday, was extremely positive and allowed the NZD to weather the international market storm. Reality is setting in and the NZD has returned to trade just above 0.6500, while the AUD has settled around 0.6750. These trade exposed currencies remain extremely vulnerable to the US/China trade wars.

Collinson FX: August 5, 2019 -

Global equities continued to lose ground, to close a week of serious losses, triggered by the ramping up of the US/China ‘Trade War’. The US announced the imposition of a further 10% in tariffs, on the balance of $300 Billion of Chinese exports, to the USA. This has triggered a major hit to equities, bonds and currencies. The flow-on effect of the trade war, is the fear of the impact on global growth, explaining the hit to Oil prices and Bond Yields. President Trump announced some positive trade news, that counter some of the losses in US agriculture, with a trade deal over US Beef exports to the EU. He pranked the press corps that the EU had agreed to a 25% tariff on Mercedes and BMW, which brought laughter after he outed to the joke.

The trade news hit commodity currencies hard, with NZ and Australia heavily exposed to the Chinese markets. The AUD has now hit a 10 year low, slipping below 0.6800, while the NZD fell to 0.6535. The ramping up of the trade war, directly impacts the supply chain and the announcement of a US/EU deal on US beef does not assist the Australian Beef exports to Europe. Non Farm Payrolls in the US confirmed the strong domestic economy and reassures markets that the US has the power and resilience to weather the trade war.

This coming week will continue to be dominated by global trade wars and economic growth prospects. The RBA and RBNZ are meeting this coming week and are expected to confirm stimulative monetary policy, in an attempt to boost their respective economies. The Chinese continue to fight the US trade war with monetary stimulus, domestically. The ‘long game’ being employed by the patient Chinese administration, may prove to be extremely painful, so to have an authoritarian Government helps with the political fallout.

Catch the new look Collinson FX website at

Disclaimer: The details expressed in this website and accompanying documents or transmissions are for information purposes only and are not intended as a solicitation for funds or a recommendation to trade. Collinson Forex Ltd accepts no liability whatsoever for any loss or damages suffered through any act or omission taken as a result of reading or interpreting any of the information contained or related to this site

Countries: | NZ: 0800 338 838 | AU: 1800 143 415 | NY: 1888 6257 833 | UK: 0800 0285 834 |

Related Articles

Collinson FX: Oct 10 -Trade talks set to resume
Equity markets rebounded overnight, in Europe and USA, fuelled by growing confidencein trade talks Equity markets rebounded overnight, in both Europe and the USA, fuelled by growing confidence in the US/China trade war. Posted on 10 Oct
Collinson FX: Oct 9 - Surplus doesn't save Kiwi
The AUD retreated to 0.6725, while the NZD fell below 0.6300 again The AUD retreated to 0.6725, while the NZD fell below 0.6300 again, despite an unexpected strong fiscal surplus announcement. The NZ Government's fiscal position continues to improve due to rising tax revenues. Posted on 9 Oct
Collinson FX: Oct 1, 2019 - Spooked business in NZ
The NZD fell back to 0.6260, after another deplorable Business Confidence number the NZD fell back to 0.6260, after another deplorable Business Confidence number. NZ Business Confidence slumped to another low, reflecting the business perception of current Government policy. Posted on 1 Oct
Collinson FX: Sept 20, 2019 - NZD and AUD fall
Australian Employment data confirmed a weaker economy, allowing the AUD to crash back below 0.6800 Australian Employment data confirmed a weaker economy, allowing the AUD to crash back below 0.6800, while the NZD sympathetically fell below 0.6300. Posted on 21 Sep
Collinson FX: Sept 13, 2019 - US heads for record
Trade exposed commodity currencies held recent gains - AUD trading 0.6865, NZD tries for .6400 Trump delayed the imposition of $250 Billion in tariffs on Chinese products, from 1st of October to the 15th of October, as an act of goodwill. This boosted US equities and they are now headed to new record highs. Posted on 12 Sep
Collinson FX: Sept 4: Shadow over equity markets
Equity markets remained under the trade war shadow, which was enlarged, after new tariffs imposed 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 move put the US share market went sharply into reverse. Posted on 3 Sep
Collinson FX: Aug 30: Confidence data kills Kiwi
The collapse of the NZD was triggered by the appalling Business Confidence number This did little to help the trade exposed currencies, as the stronger Dollar pushed the AUD back to 0.6720, while the NZD plunged to 0.6300! Posted on 30 Aug
Collinson FX: Aug 21 -AUD rallies on positive news
AUD was enthused by the firmer outlook news, rallying to 0.6775, while the NZD drifted to 0.6415 The RBA released the minutes of their last meeting and the outlook for growth was 'firmer', although their were downside risks. Members would consider further easing of monetary policy if economic conditions deteriorated further. Posted on 20 Aug
Collinson FX: Aug 16 - US Markets rebound
US equity markets rebounded after the crash, the previous day, boosted by strong US domestic data. The AUD rallied back up to 0.6780, while the NZD languished around 0.6440, still extremely vulnerable. The Chinese released some conciliatory messages, regarding the prospects of a US/China trade deal Posted on 16 Aug