Westpac - "FX: Strategy Views

• AUD/USD: The substantial reduction in rate cut pricing for RBA easing has helped the Aussie avoid a break of 1.0100. However, with GDP distinctly sub-trend and key commodities trending lower, there is a limit to how far this repricing will proceed. 1.0115-1.0380 the range for now.
• NZD/USD: Near term weakness is expected. The unwinding of extreme speculative long positioning has started and has further to play out. Our immediate target is 0.8100 (a 50% retracement of the Jun-Feb rally).  Longer term, the improving NZ economy, higher commodity prices and the expectation of high RBNZ interest rates should remain supportive.
• EUR/USD: Renewed focus on Italian political standoff later in the week plus poor EZ growth momentum vs US makes the euro a sell on rallies towards 1.31. Only reconsider at 1.32.
• USD/JPY: The most obvious way to play a strong dollar theme, with (slightly) positive carry and the combination of welcoming JP authorities vs hands off US. We still expect BoJ to disappoint but specs can be patient until at least Kuroda’s first policy decision on 4 April.
• Asia: The near term outlook for USD/Asia is likely to biased to the topside. Uncertainty surrounding China outlook, resurgent USD and rising US rates, leave Asian currencies vulnerable to further weakness. USD/KRW can push above 1100. PHP and CNY should outperform. INR and IDR are less exposed due to less significant short USD positioning."