Westpac's G10 FX model continues to "have a...>

FOREX: Westpac's G10 FX model continues to "have a healthy appetite for AUD and

NZD shorts, the combined short accounting for almost 1/3 of the portfolio.

Negative growth, yield and long term trend signals account for the bulk of the

overall short signals in both currencies. The model also quits its CAD long,

opening a modest short for the week ahead. Among the majors; the model is

broadly neutral EUR, sticks with JPY longs and reopens a USD long."

- Westpac note that there is "no shortage of important idiosyncratic currency

market drivers outside the US. Notable examples include weakening credit

fundamentals in a number of emerging markets, ongoing questions marks about

Italy and China's growth slowdown and policy easing there. But, using "principal

component analysis (PCA)", we find that a single common factor - "the dollar

factor" - is the overriding force in currency markets at the moment, by an even

more substantial margin than usual."