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In forex today, another quiet session played out through the Asian markets, with early weakness showing up in the Kiwi and Aussie as risk flows into safer assets continued through the early session after a moderately risk-off Tuesday, but headlines focusing on the Italian deficit spat with the EU helped to bolster the European bloc  and gave broader markets the excuse they were looking for to begin shorting the US Dollar once again.

EUR/USD: Rally seen in Asia could be extended if Italy-Germany yield spread retreats from 5-year highs

The Euro looks set to continue rallying into Wednesday’s European market session, but traders will be waiting to see what happens with the Italian situation in Europe, as headlines will be primed to drive major pairs today with plenty of mid-tier data on the calendar but Germany, one of Europe’s largest markets, out for the day.

GBP/USD stops just short of 1.30 in early Wednesday bump

The Sterling jumped aboard the same bullish bus the EUR wound up on today, and pinned the Sterling-Dollar chart directly to the 1.3000 handle, though a bullish break above the major technical barrier remains to be seen, and traders will be keeping their heads covered for any further Brexit headlines, especially with PM May’s Conservative party wrapping up their convention in Birmingham today.

Key notes from the Asia session

EUR/USD jumps 50 pips on Italy news

USD/INR hits new high above 73

Italy to lower fiscal deficit to 2.2 percent in 2020 – Repubblica

Iran’s rivals may not be able to make up for the shortfall: Goldman Sachs – Bloomberg