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Forex Flash: EUR/USD would range between 1.29-1.32 near term – Rabobank

The single currency remains locked in the area of 1.3020/40 on Tuesday, retracing ground after a failed attempt to break above 1.3080 on better-than-expected PMI data.

The recent USD strength was bolstered by the likeliness of the Fed to end its ongoing QE programme before previously anticipated, although that possibility soon faded away after recent comments by Chief B.Bernanke and Vice J.Yellen.

Jane Foley, Chief Currency Strategist at Rabobank, suggests the euro would face domestic headwinds stemming from Italy, Cyprus and Spain, while soft data in the upcoming periods should not be ruled out. “In summary despite the downside risks, on the back of the QE headwinds undermining the USD and indeed the position effect on risk appetite that the current huge level of liquidity is likely to have we are reluctant to call EUR/USD significantly lower in the coming months”, she remarks. Foley also adds, “On balance, over the next few weeks we anticipate a continuation of a jittery range around the EUR/USD1.29 to 1.32 region”

Forex Flash: 30% chance of the BoE extending QE – TD Securities

The UK Services PMI revealed the sharpest pace of business growth in nine months, while job creation picks up. The manufacturing report shows contracting employment at its quickest pace in 40 months, so the two sectors should combine to leave employment growth roughly flat overall. “The PMI report also noted that the combined PMIs are consistent with GDP growth of about +0.1% Q/Q in Q1, though our own tracking for UK GDP at the start of March is -0.1% Q/Q, so it’s still a very close call for whether the economy expands during the quarter, or contracts and makes for a triple-dip recession”, wrote analyst Jacqui Douglas.
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Forex: EUR/USD stabilizes at 1.3030 ahead of NY session

Investors got surprised by Services PMI figures in European countries, particularly Germany and France, and pushed the EUR/USD higher to 1.3076, but there wasn't much follow up afterwards and the market retraced those gains back to the opening price, and printed a low at 1.3016. Since then, price action is stabilizing around 1.3030.
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