Westpac - "US Dollar Index Bias: The broad contours for a decent risk rally/trend depreciation in the USD remain in place - euro break up risk continues to dissipate with Italian and Spanish sovereign risk premiums still trending lower, Bernanke said earlier this week that there is, “still quite a ways to go” on the economy, suggesting full steam ahead on $85bn/mth in asset purchases, Japanese policymakers seem intent to push the envelope with aggressive reflation policies while Chinese activity data and Chinese equities continue to flash “recovery”. The USD index has held up better than one might have expected - sustaining a rough 79.0-81.50 range for the past 3 months- but the path of least resistance looks lower against the aforementioned backdrop. There is a tactical opportunity to get long USD in early-to-mid Feb amid a likely toxic debt ceiling debate - the risks of a government shutdown are high and underpriced - but in the interim we stick with a negative USD bias."