Westpac - "AUD/USD: Domestic indicators are sufficiently mixed to leave the pair inside a rough 1.02-1.0425 range, with RBA easing probable but not imminent. Commodities are broadly weak, capping gains. Renewed Cyprus/Italy jitters help AUD vs EUR but not vs USD.
NZD/USD: Remains vulnerable to a deeper decline in the near term. The main reasons for this are (a) global risk sentiment has soured a little, (b) the speculative world remains extremely long the NZD, and (c) the drought has taken some of the gloss off NZ’s economic outlook.
EUR/USD: Cyprus may be small but we expect the nerves generated by the brutal hit to depositors of a Eurozone member to take some time to settle, especially as Italy’s political standoff continues. Advance Mar PMIs probably won’t help the euro’s cause. We remain short EUR/USD from 1.3021 and short EUR/GBP from 0.8718.
USD/JPY: Look to sell in low 95s as European politics should discourage Japanese outflows for now, reviving memories of mid-2012 which saw JP exodus from EUR bonds. Hard to see expectations rising any further for Kuroda’s first meeting at helm of BoJ on 4 Apr given spec positioning.
Asia: USD/Asia still appears vulnerable to upside pressure this week. The past month has been characterised by strong capital inflows but poor price action in many Asian currencies. KRW, SGD and MYR appear most at risk, although the deficit currencies in INR and IDR will not avoid the fall out."