Westpac's FX model has "throttled back on.....>

FOREX: Westpac's FX model has "throttled back on its USD long USD position,

trimming it in half for the week ahead to +7% of the portfolio - the smallest

long USD exposure all year. The model dials back its USD enthusiasm due mainly

to a small narrowing in yield support - the decline in US yields as political

risk in Italy has surged has matched the fall in bund yields and if anything has

outperformed JGBs. Elsewhere the more risk averse posture in global markets sees

the model up its JPY long to 20% of the portfolio. Eurozone sovereign risk does

no factor into the model explicitly and as such the model has only a modest EUR

short (5% of the portfolio). The model also throttles back its implied AUD/NZD

long position, higher global risk premia the proximate catalyst, opening a

meaningful AUD short (14% of the model) and flipping to neutral NZD from 20%

short last week."