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FXstreet.com (Barcelona) - With the weeks focus being on politics, the German ESM ruling went smoothly taking the Euro to its highest level in four month against the dollar.

Nomura strategists Jens Nordvig and Saeed Amen highlight that USD is lower against high betas in G10 and EM as expectations of QE3 from the Fed have been priced in.

They believe that "as the ECB provided a sizeable boost to risk sentiment and the German constitutional court ruling provided further positive news; we believe the short-term squeeze is close to its final leg. In terms of JPY
exposure, we retain our long NZD/JPY for now. Although Japanese Finance Minister Azumi's recent comments were not strong enough to suggest imminent action, the government is prepared to act if USDJPY declines further after today's FOMC meeting."

Elsewhere, they recommend taking profit on long risk positions such as GBP/USD.

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