The AUD spiked high towards the end of friday session over 0.87, could be that we see a kind of blowoff early next week.
A return to the old key level of 0.84 is possible if that buing binge ends.
Do you see any catalysts which provide for a USD friendly scenario? (Otherwise, in a scenario where the USD loses ground against every currency, an illiquid currency is a poor bet if not for a short term correction)
Political news: Putin reentering the arms race by cancelling the CFE. Right now, this is not the right move to re-establish safety in Central Europe.
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telegraph.co.uk
Russia pulls out of key arms treaty
By staff and agencies
Last Updated: 10:27am BST 14/07/2007
Russia has suspended its participation in a key European arms control treaty that governs deployment of troops on the continent.
The treaty is seen as a key element in maintaining stability in Europe
President Vladimir Putin signed a decree suspending Russia's participation in the Conventional Forces in Europe Treaty due to "extraordinary circumstances ... which affect the security of the Russian Federation and require immediate measures," the Kremlin said in a statement.
The law takes effect immediately.
Putin has in the past threatened to freeze his country's compliance with the treaty, accusing the United States and its NATO partners of undermining regional stability with US plans for a missile defence system in former Soviet bloc countries in Eastern Europe.
The treaty, between Russian and NATO members, was signed in 1990 and amended in 1999 to reflect changes since the breakup of the Soviet Union, adding the requirement that Moscow withdraw troops from the former Soviet republics of Moldova and Georgia.
advertisementRussia has ratified the amended version, but the United States and other NATO members have refused to do so until Russia completely withdraws.
Kremlin spokesman Dmitry Peskov said Russia could no longer tolerate a situation where it was complying with the treaty but its partners were not, and he expressed hope Russia's move would induce Western nations to commit to the updated treaty.
"Such a situation contradicts Russia's interests," Mr Peskov said.
"Russia continues to expect that other nations that have signed the CFE will fulfill their obligations."
The treaty is seen as a key element in maintaining stability in Europe. It establishes limitations on countries' deployment of tanks, armoured combat vehicles, artillery, attack helicopters and combat aircraft.
Withdrawal from the Conventional Forces in Europe Treaty would allow Moscow to build up forces near its borders.
But Russian military analysts have said the possibility of suspending participation in the treaty was a symbolic raising of the ante in the missile shield showdown more than a sign of impending military escalation.
Pavel Felgenhauer, a Moscow-based defence analyst, said the moratorium probably won't result in any major buildup of heavy weaponry in European Russia.
Russia has no actual interest in the highly costly buildup of forces because it faces no real military threat and has no plans to launch an attack, he said.
But, he said, it could mean an end to on-site inspections and verifications by NATO countries, which many European nations rely on to keep track of Russian deployments.
For the United States, the moratorium will mostly be a symbolic gesture, he said, since the US has an extensive intelligence network that keeps close track of Russian forces.
But it will still be seen as another unfriendly move in Washington, Mr Felgenhauer predicted.
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