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Session Recap: Dollar strong, EUR/USD weighed by LTRO payments

The US dollar trades broadly higher on Friday, while the euro came under renewed pressure after the repayment figures of the second 3-year LTRO were lower than expected, offsetting at the same time the better-than-expected readings from the German IFO series. Meanwhile the CAD is among the worst performers, with USD/CAD at 7-month highs in the wake of disappointing economic data. Stocks opened positively after 2 days of losses.

Main Headlines in Europe (in chronological order):

Germany: GDP falls 0.6% in Q4, as expected

Germany: IFO – Business Climate up to 107.4 in February

European Commission: Eurozone recovery to pick up speed in 2013

ECB: 356 banks repaid eur 61.09 bln of second 3 year LTRO

Forex: EUR/USD in fresh lows on ECB data

Euro bears reining in the markets

European markets strong on German IFO despite EU Commission trimmed forecasts

Cable pops back up over 1.5300 . uk clearing bank cited

Canada: CPI rose 0.5% YoY in January

Canada: Retail Sales fell 2.1% in December

American equity markets open positively Friday

Forex Flash: USD looks at QE3 and EUR eyes economic data - Commerzbank

Commerzbank analysts believe expectations regarding the Fed’s future approach will be the main driver of the greenback and consequently the EUR/USD. “As a result it did not really come as a surprise that EUR/USD shrugged off the very disappointing Phily Fed index (which fell from -5.8 to -12.5 points, while consensus had expected a result of +1.0 points). Economic data is of secondary importance if the Fed has to answer the question whether further bond purchases make sense from a cost-benefit point of view”, wrote Lutz Karpowitz, adding that despite better recovery than in Europe, the Fed has been disappointed with the pace of recovery. “The question now is less whether the Fed will be satisfied after all but whether it will reduce its QE3 measures despite – in its own eyes – unsatisfactory economic recovery”, Karpowitz said.
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Forex: USD/JPY struggling to regain 93.50

The cross can’t get enough traction to leave behind 93.50 on Friday, as buying interest is back to the Japanese yen in a context dominated by risk aversion...
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