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Forex Flash: Brazil is hiking, but reluctantly - BBH

FXstreet.com (Barcelona) - Brown Brothers Harriman analysts note that the Brazilian Central Bank decided to hike rates by 25bp last night after days (if not weeks) of shifting market expectations.

They see that yesterday´s move is just the first one of many hikes in a cycle that will total between 100-150bp, n their view, though early dovish signals suggest the lower end is more likely. They add, “The statement was not convincing about the bank’s commitment to hike, and two members voted for no change. As a result, yields came crashing down across the local swap curve in a strong bull steepening move (see graph below).”

Forex Flash: EUR/USD to resume drop below 1.3000 and 1.2930 towards 1.2740 and 1.2679/61 - Commerzbank

The EUR/USD has recently failed ahead of the 1.3225/50% retracement and charted a small inside day yesterday. “Current indications remain that the market will remain capped here (Elliott wave count and TD perfection set-up) and we look for the resumption of the down move”, wrote analyst Karen Jones, adding that the market has found some support at 1.3000/1.2995 and “this guards the 200 day ma at 1.2930 en route to the 1.2740 recent low”, while key support remains 1.2679/61 (61.8% Fibonacci retracement of the July-to-January rise and the November 2012 low). “Above 1.3225 will indicate a deeper retracement to 1.3340 and possibly 1.3503 (not favored)”, she concluded.
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Forex Flash: Markets calmer into week close - OCBC Bank

Emmanuel Ng of OCBC Bank note that markets were relatively calmer on Thursday with the majors orbiting the dollar and EUR/USD edging higher following the Spanish debt auction.
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