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. Forex Flash: Chaotic euro overshadows positives in the region – ANZ

At the time of writing, inconclusive Italian elections have pushed the euro lower after a rapid rise to start off 2013. According to the ANZ Research Team, “This may run further near-term, but chaotic as it appears, Italy is not Greece. It is forecast to run a primary budget surplus around 5% of GDP this year and is returning to a current account surplus.”

The uneven euro area pick-up with France struggling to recover also weighs on the euro for now. However, “Don’t overlook the fact that major positives are happening in the euro area, not least of which is a return to a sustainable balance of payments surplus, aggregate trend improvement in budget deficits and banking union. A re-run of the 2009-
2012 crises is unlikely though – ultimately we have faith that Italy will sort this political hiatus out and that the euro will resume its uptrend in due course.” the team adds.

Forex: EUR/USD remains capped by 1.3125

The euro trades firmer versus the dollar on Wednesday although it has been largely confined to yesterday's range as market continues to assess the outcome of Italian elections. The fact that Italian yields rose at an auction highlight the political stalemate, even though for euro investors this was offset in part by better-than-expected confidence survey.
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Forex Flash: EUR/USD would keep the current levels near-term – Rabobank

The bloc currency clings to the key level at 1.3100 on Wednesday, after better data from the euro area improved the sentiment and pushed the cross from the mid 1.30s...
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