Forex Flash: USD index raised to 1m target of 84.50 – Westpac

FXstreet.com (Barcelona) - The USD index uptrend given a fresh lease of life as the Eurozone crisis resumes. According to Global FX Strategist Sean Callow at Westpac, “We suspect it has further to run as the longer term ramifications of the new policy of bailing-in uninsured depositors and what it says about risk mutualization vs. private sector risk ownership sink in.”

However, the USD could take knock in the event payrolls come in around
100-150k but suspect it will be shrugged off amid greater concerns on Cyprus, Slovenia (2yr yields +340bp in the last 2 weeks to 5.39%), and the ongoing Italian political deadlock – “we have raised our 1 month target to 84.50.” he adds.