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Forex Flash: AUD/NZD seen at 1.22 mid-year; 1.1765 year-end - BNZ

FXstreet.com (Barcelona) - The week ahead is shaping up as another important one for the AUD/NZD, says Mike Jones, FX strategist at Bank of New Zealand. The cross rallied hard after the contrast of a dovish RBNZ and upbeat AU employment data.

"BNZ economists have pushed back the expected timing of the first RBNZ rate hike to March 2014 now. Meanwhile, our NAB colleagues have trimmed the number of 25bps RBA rate cuts expected this year to two, from three" Mike says.

Mike adds: "These changes to the NZ-AU monetary policy outlook made us revise higher the extent of AUD/NZD declines expected this year. We are still bearish, but have risen our mid-year forecast up to 1.2195 and our year-end forecast up to 1.1765."

Forex Flash: RBA minutes should be tilted towards case for easing - Westpac

The minutes from the RBA Board’s 5 March meeting will be published at 00.30GMT. According to Sean Callow, FX strategist at Westpac: "AUD/USD gained about 30 pips net on the steady hand two weeks ago, where retention of the line “scope to ease policy further” was balanced against a more positive view of the global economy and “some prospect of a modest increase” in investment outside mining." The analyst adds "it is hard to see why the RBA would go out of its way to support AUD and the rates curve so the language should be tilted towards the case for easing - later."
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Forex: AUD/JPY recovers above 99.00 pre-RBA minutes

AUD/JPY is last at 99.17, near daily and weekly highs, flat for the week so far, having managed to close yesterday's massive opening gap down to fresh 6-day lows at 97.33 on the back of news coming from Europe about the Cyprus bailout. The cross has bounced ever since on both Aussie strength and Yen weakness completely closing mentioned gap.
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