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Forex Flash: Fed minutes reveal heightened debate over policy – UBS

According to Research Analyst Garth Berry at UBS, “The Fed Minutes yesterday revealed that like many other central banks globally, debate over policy is rising, in some cases to boiling point. Despite the launch of numerical targets, it appears that the 2013 FOMC is demanding more flexibility on policy execution.” The dollar found bids as the minutes showed 'a number of' FOMC members saw a need for early slowing of stimulus, regardless of economic performance. However, the Fed as a whole is not in any risk of moving beyond debates, as opposed to the BoE, whose minutes yesterday showed deep splits in policy direction and forward implementation.

Nonetheless the market has already determined that broader policy is only heading in one direction: more stimulus. Whether incorporating a weaker currency officially into BoE policy is fast becoming a moot point if markets have already fully factored this in and allow commensurate adjustment in the economy.

Forex: EUR/USD muted after French data

The bloc currency posted no reactions after French flash manufacturing and services PMI came in short of expectations for the month of February, falling to 43.6 and 42.7 vs. 43.8 and 44.5, respectively...
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Forex Flash: EUR/USD may close below 1.3202 key support - Commerzbank

The EUR/USD recent rebound from the 1.3315/00 area of support (long term Fibo retracement and the 3 month uptrend) was extremely tepid and market breached below it yesterday. “Key support at 1.3202, the 7 month uptrend, is exposed and a close below here is required to negate the up move completely”, wrote analyst Karen Jones. “Please note given strength of the US Dollar elsewhere this is looking increasingly likely”, she added, negative biased while capped by the 1.3434/1.3520 resistance. “Only above here will suggest another run up to the 1.3711 recent high (not favored)”, the Commerzbank analyst concluded.
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