ForexGen In European Session

ForexGen were actively in European session as a few discrete events had traders scrambling.
First were the comments from BoE Governor Meryn King during MPC testimony to Treasury Select Committee who stated "[...] this is not an economy that has completely grounded to a halt but we are looking ahead and expect some slowing…." GbpUsd sold off as the market hurried to price in easing as early as April.

Second was the German IFO which caught the market completely off guard. Most participants had risk slanted to the downside but that was not to be. German IFO Current Assessment printed up to 111.5 vs. 109.5 exp while hit Expectations 98.4 vs. 97.8 exp. With the economic engine of the Euro zone still humming along in light of an elevated Eur and slowing global demand this was clearly a positive. An economy which is declining at a moderate pace will give the ECB greater maneuverability with interest rates and keep supporting the Eur.

And the final event was US durable Goods Order Feb which fell -1.7% vs. 0.7% exp on the back of weak Jan figure. This is just further indication that when an economy drops into recession things unwind very quickly. Watch for further Usd weakness.