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Forex pairs in this Article » (Barcelona) - Wells Fargo Head of Currency Strategy Nick Bennenbroek notes that USD is mixed, with market participants cautious as they wait and hope for progress in the US budget talks.

He writes, "Financial markets have shown increased sensitivity to 'fiscal cliff' headlines, with equity markets and foreign currencies initially falling yesterday on downbeat comments from Senate Leader Harry Reid, before recovering on news that the House would reconvene on Sunday. The main U.S. event today should be the scheduled meeting between President Obama and the leaders plus the minority leaders of the Senate and the House. Any signs of compromise would be a clear boost for equity markets and most foreign currencies, but they would likely come under further pressure if budget talks remain stalled."

Elsewhere, In Japan, he notes that the new government continues to push for aggressive monetary easing, though market caution is providing some support for the Yen which is steady against the Greenback today. In other FX moves, he sees that the euro is down and the Norwegian krone is steady, while the other G10 currencies are modestly higher. Emerging European currencies are lower, Latin American currencies are mixed, and emerging Asian currencies are generally higher.

Bennenbroek finishes by writing, "Currency trading in the coming days will clearly be dominated U.S. budget headlines - we expect choppy trading, with the possibility of foreign currency weakness before year-end followed by foreign currency strength early in the New Year."
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