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Forex pairs in this Article » EUR/USD (Barcelona) - Westpac's Q1 2013 Forex outlook is constructive on EURUSD to trade towards an initial target of 1.35, "before we would look to sell" notes strategist Richard Franulovich.

Richard sees stronger than expected German Dec CPI as a contributing factor for the ECB to maintain rates unchanged, with the fiscal cliff being averted also playing a positive role on the Euro, he says. "Spanish and Italian yields continue to edge lower and there seem to be few triggers for a substantial rise in sovereign risk premiums early in 2013" Richard adds.

Lastly he also comments on Italian politics, saying "the odds of anti-EMU anti-reform Berlusconi leadership are very low." Greek funding risk, according to Mr. Franulovich, "is off the boil for a few months and doubts about whether Spanish PM Rajoy will ever request a bailout seem moot as markets are content enough that a backstop is in place..."
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