Forex Flash: Super-loose fed should weigh on USD ahead – Westpac
FXstreet.com (Barcelona) - With the Fed's s super-loose monetary stance, the Westpac Strategy teams expectations are that its should weigh on USD multi-week but there may be haven support at times if US scal negotiations falter.
Looking to AUDUSD, they believe that the Fed's printing plans have helped the pair punch higher but as of today it is flat against pre-FOMC levels. The September high of 1.0625 should cap and if US congress heads into the break without the clear outline of an agreement, they feel that a lurch back to the low mid 1.04's is likely.
Moving to NZDUSD, they feel that investors have few qualms about using the Kiwi to play for USD decline, with RBNZ Governor Wheeler focused on expected better growth in 2013. The team have set a target of 0.8573 multi-day/week, but also at some risk from Washington, DC.
With EURUSD, the team notes that price action has taken a turn for the better since the FOMC, while Italy's political theatre has had little lasting impact. They are looking for a push to 1.3280 into month-end, with dips driven by US news.
Finally, looking to USDJPY, they feel that the pair has certainly overshot expectations but they still expect a sizeable pull-back as speculators take profits. They note that Abe's sweeping victory helps but Thursday's BoJ meeting is likely to produce similar steps to those seen during 2012, with Shirakawa still in charge. They see risks to 82.50-83 this week ahead.
Looking to AUDUSD, they believe that the Fed's printing plans have helped the pair punch higher but as of today it is flat against pre-FOMC levels. The September high of 1.0625 should cap and if US congress heads into the break without the clear outline of an agreement, they feel that a lurch back to the low mid 1.04's is likely.
Moving to NZDUSD, they feel that investors have few qualms about using the Kiwi to play for USD decline, with RBNZ Governor Wheeler focused on expected better growth in 2013. The team have set a target of 0.8573 multi-day/week, but also at some risk from Washington, DC.
With EURUSD, the team notes that price action has taken a turn for the better since the FOMC, while Italy's political theatre has had little lasting impact. They are looking for a push to 1.3280 into month-end, with dips driven by US news.
Finally, looking to USDJPY, they feel that the pair has certainly overshot expectations but they still expect a sizeable pull-back as speculators take profits. They note that Abe's sweeping victory helps but Thursday's BoJ meeting is likely to produce similar steps to those seen during 2012, with Shirakawa still in charge. They see risks to 82.50-83 this week ahead.
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