Forex Flash: Fiscal cliff pt2 chance to buy dips in risk assets - Westpac (Barcelona) - Ahead of the next fiscal ordeal in the US, this time in the form on having to raise the US debt ceiling, Sean Callow, FX strategist at Westpac, gives his view on the matter, projecting the most likely scenario one in which risk currencies "should suffer damage at times, especially in mid- to late February" he notes. The analyst seems confident that both the USD and Treasuries, "should thus find safe haven demand as the Congressional name calling reaches its peak" he adds.

Mr. Callow expands: "But with a ratings downgrade unlikely - at least not yet - and investors likely to remain confident that default is not seriously being considered, the damage to the likes of AUD, EUR and NZD should be contained. The episode may well be best viewed as a chance to buy dips in risk assets amid mostly more favourable global conditions in H1 2013. But risks to this view are skewed to the negative side for risk assets, with a prolonged standoff more likely than a quick resolution."