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25 Mar 2013
Forex Flash: Dollar weakens slightly despite Cypriot meleé - OCBC Bank
FXstreet.com (Barcelona) - Emmanuel Ng of OCBC Bank note that the dollar weakened across the board on Friday with the EUR/USD testing above 1.3000 briefly despite background concerns surrounding Cyprus and amid hopes that a resolution would be found over the weekend.
He adds that on early Asian trading this morning, news filtered through that the EU and Cyprus have cobbled together a draft agreement saw the EUR/USD popping higher in early dealings. He writes, “Note that the proposal will still have to be presented before the EZ finance ministers and uncertainty may well persist in the coming sessions with investors on the lookout for evolving headlines.” As such, he adds that EUR may continue to remain fragile across the G10 space, although a sense of containment may still prevail. Elsewhere, he finishes by noting that the assurance of a continued low interest rate environment by the Fed’s Raskin on Friday may deny the dollar of implicit short term strength from this perspective although markets may continue to look towards Bernanke’s appearance tonight.
He adds that on early Asian trading this morning, news filtered through that the EU and Cyprus have cobbled together a draft agreement saw the EUR/USD popping higher in early dealings. He writes, “Note that the proposal will still have to be presented before the EZ finance ministers and uncertainty may well persist in the coming sessions with investors on the lookout for evolving headlines.” As such, he adds that EUR may continue to remain fragile across the G10 space, although a sense of containment may still prevail. Elsewhere, he finishes by noting that the assurance of a continued low interest rate environment by the Fed’s Raskin on Friday may deny the dollar of implicit short term strength from this perspective although markets may continue to look towards Bernanke’s appearance tonight.