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Forex Flash: NZD/USD to rest 0.8477 on rising NZ rates and dairy prices – Westpac

FXstreet.com (Barcelona) - According to Sean Callow, a Global Markets Strategist at Westpac, “The broad contours for a decent risk rally and trend depreciation of the USD remain in place – euro break up risk continues to dissipate with Italian and Spanish sovereign risk premiums still trending lower.”

The event risk for the NZD/USD is not until the RBNZ meeting scheduled on the 31 of January. Westpac expects zero quarterly change (Q4 is seasonally low), which would produce an annual rate of 1.1%, however a negative print is quite possible. Next week is light event-wise, only PMI and credit card spending (Thursday).

According to Sean Callow, a Global Markets Strategist at Westpac, “The NZD/USD outlook remains positive, despite the consolidation since 11 January. In the near term, it is vulnerable to this correction extending to around 0.8300 (a potential catalyst is tomorrow’s CPI release) though we would view such
a dip as a buying opportunity. Prior to the US debt ceiling debate mid-February we expect NZD/USD to test 0.8477, assisted by rising NZ interest rates and dairy prices.”

Forex: EUR/JPY rallies through 119.00 after Spain and Van Rompuy

The EUR/JPY eased during the Asian session to find support just above the 117.00 mark, being able to retrace those losses afterwords. Euro strength has allowed a rally above the 118.00 and now, with the release of EMU construction output and the Spanish bond auction, the cross breached through the 119.mark.
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Forex: EUR/USD extended gains on Van Rompuy and Spain auction

The widely expected Spanish bond auction found lower average yields, selling a total of €4.5 through 3-year bills (at 2.713%, from previous 3.358%), 5-year bills (at 3.770%, from 3.988% previously) and 2041 bonds (5.696%, from previous 6.002%). As results came in, so the EUR/USD breached above the 1.3350 previous European morning resistance area.
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