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The pair could come under pressure today, with the RBA minutes likely to reinforce its easing bias; this could see it retest recent lows in the 0.93 region. While nothing new is expected, we could hear more about what might be the key trigger of a deepening of the easing cycle.
The pair has slipped below 100 early in Asia as the USD experiences some gyrations on the back of mixed Fed comments. Fed member Dudley said he’s getting more hopeful the US economy is gaining strength as the drag from fiscal policy wanes, but warned economic growth isn’t yet sufficient to ensure the substantial labour market gains to warrant tapering. At the same time, Plosser said the central bank needs to set the final size for QE and end the program once that amount is reached. With more Fedspeak on the way, we are bound to see increased volatility in USD/JPY. I continue to favour buying the dips in the pair.
The euro got a lift from positive risk sentiment and a declining greenback. This saw the pair trade through 1.35 again to a high of 1.354. EUR/USD has since pulled back into the 1.35 region and will be in focus later today, with some sentiment readings due out. At 21.00 AEDT we get the ZEW economic sentiment for Germany and the region.
MND will be an interesting one to watch today as it holds its AGM. Given its biggest clients are the major miners, then it is definitely an interesting one to watch. From a price action perspective, MND seems to have found support in the $17.50 region and this could lead to a sustained recovery through to $20.
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