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Forex Flash: Officials weigh ESM recapitalizations – Deutsche Bank

FXstreet.com (Barcelona) - The head of the ESM believes that allowing the fund to directly recapitalize banks would deplete its lending capacity much faster than extending loans to governments.
According to Macro Strategy Analysts J. Reid and C. Tan at Deutsche Bank, “Officials are now discussing whether the home government should retain a stake in additional recapitalizations, echoing a similar report from earlier in the week.”

As such, “Such national stakes could absorb the first round of losses on capital investments and protect the ESM and the rest of the eurozone.” they add. ECB Governing Council member Ewald Nowotny said he did not share Juncker’s concern about the euro’s strength, adding that the ECB targeted price stability rather than exchange rates. Juncker said on Tuesday that the euro was “dangerously high” which helped cause a 0.6% selloff in EURUSD.

Forex: EUR/USD extended gains on Van Rompuy and Spain auction

The widely expected Spanish bond auction found lower average yields, selling a total of €4.5 through 3-year bills (at 2.713%, from previous 3.358%), 5-year bills (at 3.770%, from 3.988% previously) and 2041 bonds (5.696%, from previous 6.002%). As results came in, so the EUR/USD breached above the 1.3350 previous European morning resistance area.
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Forex: USD/CHF surrenders gains and trading at 0.9310/13

The USD/CHF plunged off of its session high at 0.9356 during European trading Thursday, as the pair has surrendered its gains in recent minutes. After the publication of weak EMU data, the cross is incurring a marginal loss of -0.01%, settling in the region of 0.9310/13 in these moments.
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