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Forex Flash: USD attempting to break higher - BTMU

FXstreet.com (Barcelona) - Lee Hardman, FX analyst at the Bank of Tokyo Mitsubishi UFJ notes that the outperformance of the US dollar has extended further early this week with strength most evident against high beta currencies such as the Australian and New Zealand dollars.

He feels that the US dollar appears to be attempting to break higher in the near-term driven by building expectations that the Fed will taper the pace of QE in the second half of the year. He feels that a tightening in global liquidity conditions would likely weigh heavily upon high beta currencies whose values have been distorted by loose liquidity with both the Australian and New Zealand dollars still highly overvalued. Further, he feels that the correction lower for the Australian dollar is well overdue given the ongoing slowdown in growth in China, however, it could still prove that the market is currently expecting the Fed to pare back QE too prematurely which is exaggerating US dollar strength in the nearterm. In contrast Hardman comments that the yen continues to under perform with Abenomics still helping to lift market based inflation expectations and driving portfolio rebalancing amongst Japanese investors into riskier assets.

Forex Flash: CHF to face pressure as safe haven appeal wanes – UBS

The Swiss franc has been a major beneficiary of safe-haven flows since 2007. As UBS data below shows, investors across all major segments remain short EUR/CHF and corporates and private clients remain short USD/CHF. However, the market's big long in the franc is at risk. Yesterday the USD/CHF made new highs for 2013 above 0.9660 and the EUR/CHF is nearing this year's high around 1.2570.
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Forex: USD/CAD trend line piercing 1.020 handle

The Loonie had breached 1.0200 in London’s open with continued broad dollar strength printing a high of 1.0210 at time of writing. (08.45BST).
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