The bullish move in German rates saw the 2-year yield close in negative territory yesterday. Further downside here is likely to put pressure on the EUR in FX space. We are monitoring nearby supports in EUR/USD and EUR/GBP, as a break below would signal a downside extension within the greater range. Elsewhere, commodity currencies remain under pressure although profit taking in base metals and crude oil could stall the overall weakening trend as investors pare back positions ahead of the weekend.
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Barclays