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Forex Flash: Abe prepares to name ADB´s Kuroda BoJ Gov - Societe Generale

Kit Juckes, Global Head of Currency Strategy at Societe Generale notes that Abe looks set to appoint the ADB´s Kuroda as the next BoJ Governor.

Meanwhile back in the UK, Juckes notes that the downgrade has given birth to a torrent of GBP negativity and for a piece of news that was inevitable at some point that an overreaction. He feels that one of the reasons for Sterling weakness has been enthusiasm for currency weakness from misguided monetary and political leaders. He feels that GBP/USD may bounce however, offering a chance for late comers to join in the selling frenzy.

Looking elsewhere, he notes that Yen has fallen sharply in early Asian trading and writes, “Heaven only knows whether that's an over reaction. Kuroda is a fan of a weaker yen and of deflation-bashing. End-yr USD/JPY forecast is still 100 and 110 a longer term target. On this too, we have written much.” He continues to note that the Italian election goes critical and is now a proper 5-star shambles. He writes, “We have no opinion polls to go on but must fear an inconclusive outcome. Eur/$ broke support at the of last week.”

Forex: EUR/JPY kept mostly below 124.50

Like in the USD/JPY, the early Yen sell off affected the EUR/JPY, reaching as high as 124.92. Since then, the cross has been trading mostly below 124.50 (more precisely, 124.66) and support by the 124.00 line.
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Forex Flash: China: HSBC flash PMI drops surprisingly - Nomura

Nomura economist Zhiwei Zhang notes that the HSBC flash PMI dropped surprisingly to 50.4 in February from 52.3 in January (Consensus: 52.2).
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