Collinson FX Commentary: Jan 30 - Boom times in US
by Collinson FX 31 Jan 2018 02:24 NZDT
31 January 2018
Day 2, Bay of Islands Sailing Week, January 25, 2018 © Richard Gladwell
Collinson FX Commentary: Jan 30 - Boom times in US
Inflation became the hot topic of conversation, in the bullish US economy, to open the new weeks trade. The booming US economy brings with it inflation. The extent of that inflation is the key question to be answered and managed.
For the first time in a generation, inflation has been welcomed, even sought.
Central Banks have employed extremely loose monetary policy, to stimulate growth and investment, which would be reflected in growth and inflation. US bond yields popped overnight to reflect just this scenario. This temporarily halted the crashing Dollar.
The EUR slipped back to 1.2340, while the Yen traded 109.10, reflecting the resurgent reserve. This directly impacted commodity prices and the associated currencies. The AUD fell below 0.8100, while the NZD tested 0.7300, on the downside. Bond yields remain the focus, to see if the Dollar moves are a flash in the pan, or a trend reversal?
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