The Aussie dollar barely made any recovery on Friday

Good Morning,

- Australian dollar trade to 5 1/2 year lows as investors bet on the Australian central bank reducing interest rates when it meets next week. Dollar, yen and euro general trade stable. The Aussie dollar barely made any recovery on Friday, after dropping to $0.7720 on Thursday, a low unseen since July 2009.

- Last figures show near 70 percent chance the Reserve Bank of Australia will cut its 2.5 percent cash rate at its policy meeting on Tuesday, Feb. 3, up from less than 10 percent earlier this week.

- Swiss franc, eased broadly on renewed speculation of intervention by the Swiss National Bank. The euro climbed as far as 1.0525 francs, reaching its highest since the Swiss National Bank abandoned its 1.20 per euro cap two weeks ago. It last traded at 1.0450 level.

- The Gross Domestic Product (GDP) one generated by the Spanish economy registers a variation 0.7% in the fourth quarter of 2014 from the previous quarter. According to quarterly GDP advance estimate, this is two tenths higher the records gives the previous quarter (0.5%).

- The Swiss KOF Economic Barometer decreased in January 2015 by 1.8 points to a value of 97. After the indicator had hardly changed at the end of 2014, it now falls a little further below its long-term average. In the surveys completed in January, nearly 94% of the participants responded before the repeal of the currency floor by the Swiss National Bank. Because the policy change of the National bank came as a surprise for many companies, the January figure of the KOF Barometer reflects the new situation only very limited.

-BNP Paribas on EUR/USD: Positioning analysis indicates scope for further EUR shorts over the medium-term: "The speed at which short EUR positioning has increased suggests that there may be room for short-term profit taking. However, from a longer-term perspective, bearish EUR positioning does not yet appear to be extreme. In particular, the ‘client exposure’ component of our analysis has a score of only -8," BNPP notes. "We view that with FX investors appearing to hold light bearish EUR positioning, there is scope for the EUR to be sold on rallies," BNPP argues. ECB QE to encourage further debt outflows: "Looking ahead, we expect the trend of debt outflows to accelerate as ECB QE weighs on real yields," BNPP projects. In line with this view, BNPP revised its EUR/USD targets to 1.13 by end of Q1, 1.10 by end of Q2, 1.08, by end of Q3, 1.05 by end of Q4 and to 1.00 by end Q1 of 2016.

- telegraph.uk: It’s Germany’s worst nightmare. Increasingly isolated, ganged up on, and even hated by much of southern Europe, it is fast losing the argument over the future of the euro. Even the Governor of the Bank of England, Mark Carney, has been at it. This week he joined in the German bashing with a full-frontal attack on Berlin’s austerity agenda. And it’s causing confusion, dismay and resentment in equal measure in this most stable, disciplined and civilized of nations. To understand the decisive shift in narrative that has taken place in Europe over the last couple of weeks – from the defeat Germany has suffered at the hands of the European Central Bank, to the Syriza victory in Greece and its demands for debt forgiveness – you have to go back to the euro’s origins and Germany’s place in it. Germans never wanted the single currency in the first place, for like Britain, they instinctively understood where it would lead – to a fiscal, or transfer, union which Germany, as Europe’s dominant economy, would be forced to bankroll. If given a referendum, they have said no.

- Watch today: Euro area inflation data, US GDP & US consumer sentiment.

Have a nice Weekend !