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Forex Flash: Looking past Cyprus, Italian politics are next - BBH

FXstreet.com (Barcelona) - Brown Brothers Harriman analysts believe that when investors have managed to look beyond Cyprus, Italian politics seem to be the next worry on the horizon.

They feel that there are increasingly worrisome signs in the real economy, as well as in the financial sector too. They write, “The March manufacturing PMI (44.5) is the lowest since last August and the forward looking orders slumped since last May. Output and employment are at seven-month lows. The general reduction of Target2 imbalances continued into February.” However, the notable exception was in Italy where liabilities rose by EUR 28bln, the largest increase in a year and reversing the improvement seen over the past six months. In addition, unlike most other countries central banks, the Bank of Italy increased its borrowing from the ECB for the first time since last July. They write, “Without putting too fine of a point on it, these figures point to increasing financial strains in Italy.”

Forex: GBP/USD at lows on NY session

The GBP/USD is underperforming today, particularly since the publication of the preliminary release of the UK March manufacturing PMI by Markit (contractionary at 46.8, from 47.9 and below 46.6 consensus), allowing a drop from 1.5232 opening price to as low as 1.5121 on the New York opening.
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Forex: AUD/USD aiming at daily highs again

The AUD/USD is holding most of its gains made during the Asian session as the RBA decided to keep its monetary policy intact, with the rate at 3% for the third month in a row. The cross had risen to 1.0479 high, and after profit taking ahead of the European opening, the market climbed the chart back to its highs. Ahead of the NY opening, the AUD/USD eased again, to 1.0454, and is currently attempting at moving higher.
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