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Forex News:Developing Deutsche Bank situation and US durable goods dominate markets

The first piece of Forex News came from the US this morning in the form of the monthly Core durable goods orders and Durable goods orders. Last month the core durable index achieved a very encouraging 1.5% way over the anticipated forecast of 0.4%.

Unfortunately, the growth wasn’t to continue however the number did slightly shade expectation reaching a -0.4% against the envisaged slump -0.5%.

Durable goods had been projected to achieve a reading of -0.1% having achieved 4.4% last month comfortably over the predicted level of 3.4%. The release was better than predicted achieve zero growth of 0.0%.

The data highlighted very little change in the durable good index part of the reason being was the continuing slump in equipment shipments indicating the scope for potential future slips in manufacturing.

One ray of light came in the form demand of goods households which is currently underpinning the manufacturing sector.

It would also seem the military is investing in the economy order of goods and equipment for the US armed forces increased by 0.6% however this was based on a number which was revised down.

The afternoon brought with it speeches from both Mario Draghi and Janet Yellen.

First came Draghi who was speaking on current developments in the Eurozone. Draghi was chairing a meeting with members of the German Bundestag (German parliament). During the debate Draghi stressed the need for urgent monetary reform in order to boost growth. Draghi once again proudly defended the ECB’s policies, insisting that low interest rates were the route to higher interest rates and sustainable growth.

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Elsewhere in the Eurozone the current situation with Deutsche bank developed. The bank was issued with a fine of $14Bn due to the miss-selling of historic repackaged mortgage products which cast doubt upon it continuation, sparking fears of a new Lehman Brothers esque scenario. This panic saw the share price drop to levels last witnessed in the mid 80’s. This was compounded by the stance and previous comments voiced by Chancellor Merkel who was very against state assistance.



This evening however it would appear that the German government has softened its initial stance and there are rumours of potential assistance from the German government if extra capital was needed.

In any case the Euro traded relatively consistently against the GBP and USD. GBP/Eur began the European session at 1.16005 experiencing a day low of 1.1574 before closing at 1.1602 following the murmurs of potential government assistance. EUR/USD reacted in a similar manner opening at 1.1198 hitting a high of 1.1230 before weakening to 1.1190 and then recovering.

Finally, Yellen testified at the US regulatory committee relating to the 2010 Dodd Frank act and the ongoing regulation of the US financial system.

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