ANZ are "bullish on euro medium-term....>

EURO-DOLLAR: ANZ are "bullish on euro medium-term. The relative monetary policy

story should provide a boost to EURUSD going forward; especially, given that the

expected normalisation in rates should drive a comeback in capital flows.

Near-term, we think the weakness in the EURUSD is close to a bottom. However,

while downside risks are likely contained from here, we believe that a catalyst

for a turn in EURUSD is unlikely to happen just yet. Investors will need to

re-price the outlook for the ECB; and, for that to happen, inflation data needs

to firm. As such, the big test for the euro will be May's HICP, in our view.

April's core inflation data was weak and well below the ECB's projected 1.1-1.2%

for this year, but the ECB will no doubt try to look through the noise, as most

of the weakness is seasonal. A rebound in May's HICP data (31 May), though, is

needed for the ECB to keep its forecast unchanged and stay on track to

neutralising its language. If inflation rebounds next month, as we believe it

will, the euro is likely to resume its upward trend. As such, we believe we are

getting close to levels were investors should start to reset longs again."