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Month-end rebalancing conspires against the...>

FOREX
FOREX: Month-end rebalancing conspires against the USD
-The greenback is comfortably the worst performer today (alongside the JPY) with
month-end rebalancing models at a number of different banks continuing to point
to a selling bias against USD and in favour of EUR, GBP and CAD. Italy news has
also proved EUR positive, as the prospective cabinet sees Eurosceptic Savona
shifting from the finance to the foreign ministry - a move that may appease the
President and finally form a workable government.
-EUR/USD trades near the best levels of the week (just below Monday's $1.1734
high), with a slew of option expiries layered between $1.1700 to $1.1725 seen
providing near-term support for the pair. A higher-than-expected Eurozone CPI
estimate has also underpinned the move.
-USD/JPY slipped sharply in the Asian session but all weakness has been erased
ahead of the NY crossover as risk sentiment improved across the continent. As
Italian equities and bonds improved from the open, USD/JPY now looks to break
above Y109.
-US PCE and Canadian GDP numbers are the calendar highlights.

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