Forex Flash: Euro vulnerable for longer to the downside - BTMU

Negotiations in Italy to form a coalition government will likely be held in the week ahead, which according to Bank of Tokyo-Mitsubishi London office, "will leave the euro vulnerable for longer to the downside" although the bank says that "fresh elections are unlikely to be called in the week ahead."

Bank of Tokyo-Mitsubishi UFJ adds: "We expect EUR/USD will find strong support around 1.30 helping to limit scope for further downside. The pair has already fallen sharply during February. In the US, it appears unlikely that a last minute deal will be reached to avert the sequester spending cuts set to begin hitting the US economy 1st March, which may weigh upon the US dollar."

Mar 1, 2013

Forex Flash: Improvement in Aus house prices buys RBA some time - NAB

Today's Rismark house prices climbed by 0.3% in February, up 1.3% y/y. As explained by NAB senior economist David deGaris, "Melbourne led the charge in Feb among the larger capitals (+1.5%), with Sydney steady (+0.1%), while Darwin (+2.3%) and Canberra (+1.9%) saw increased momentum."

Forex: AUD/USD little moved around 1.0220

Aussie is not catching up enough steam so far, following both PMI China data, the official and the final HSBC one. Both of them came in in line with expectations, being the official one 0.01 lower than expected, while HSBC came in exactly as the previous one at 50.4. Probably more worried on US “sequester”, that will take place automatically in about 2 hours time when midnight strikes in NY, as “Congress on Thursday abandoned efforts to avert the cuts and left town for the weekend,” said the Washington Post.