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Forex Flash: AUD may soon shrug off near term prospective cut - RBS

FXstreet.com (Barcelona) - The Aussie no longer looks as expensive and "it may have already factored in many of the current negatives (weaker China growth, weaker domestic data, RBA cuts, bigger budget deficit)", notes Greg Gibbs, strategist at RBS.

Greg adds: "Since mid-2012, AUD is second from the bottom in a list of alternative reserve currencies. We await the Australian employment, which may be weak if recent data trends are continued, and it may see another dip in the AUD. This may keep focus on near term rate cuts. However, just as the AUD bounced back after its October rate cut last year, and shrugged off the December rate cut, the AUD may soon shrug off the cut earlier this week, and the prospective cut in coming months."

Forex: EUR/JPY ready for the next leg up?

The EUR/JPY closed the day sharply higher, up 78 pips at 130.20. During the European session, the pair seemed to get a boost from German Industrial Production (MoM) which came in at 1.2% vs.-0.1% estimate. Data will be light in the next session as European markets will be closed for holiday.
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