Westpac - "AUD Bias: The global appetite for USD despite aggressive Fed QE and a sluggish US economy makes it tough for AUD/ USD to break above 1.0380. Key commodity prices also remain unimpressive regardless of China property scares. The domestic story is mixed, not soft enough for the RBA to deliver on its easing threat but enough for markets to keep leaning towards at least one more cash rate cut. But underlying demand for risk assets is persistent (MS Asia-Pac shares at highs since Aug 2011). This combination seems set to limit losses to no further than the recent 1.0115 low.
NZD Bias: Bias: The technical break below a 9 month long uptrend last week has been sustained, keeping our week ahead negative bias intact. As long as 0.8350 holds, we expect a continuation of this multi-week decline to around 0.8100. Countering the positive local news will be a strong US dollar plus speculative NZD positioning which has been extremely long, last week’s modest unwind likely to intensify. Beyond this positioning cleanout though, we see upside beyond 0.8600 in 2013."