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Broadgate: Market News 28/2

28 February 2012

The euro gained against most major peers before the European Central Bank allots a second round of unlimited three-year funds tomorrow to help the region’s banks.

The 17-nation currency erased an earlier loss against the yen amid speculation the ECB’s long-term refinancing operation will calm concern that about Europe will struggle to resolve its debt crisis, boosting demand for higher-yielding assets.

Australia’s dollar rose versus the U.S. currency as equities advanced. The yen held yesterday’s gain versus the dollar as traders bet the Japanese currency’s drop to a nine-month low yesterday was too rapid.

The dollar weakened against the yen as the greenback’s 14- day relative strength index was at 72 today, above the 70 level that some traders see as a sign an asset may reverse direction.

“The dollar and euro have risen too rapidly against the yen,” said Junichi Ishikawa, an analyst in Tokyo at IG Markets Securities Ltd.

Orders for U.S. durable goods probably declined in January for the first time in four months as aircraft demand slowed, economists said before a government report today.

Factories remain at the forefront of the expansion that began in June 2009, spurred by a stronger auto demand and business investment in equipment.

At the same time, rising fuel costs and an economic slowdown in Europe may temper the industry that accounts for about 12 percent of the world’s largest economy.

Orders for non-defense capital goods excluding aircraft, a proxy for business investment in items such as computers, engines and communications gear, fell 1.4 percent after a 2.9 percent gain, according to the median forecast.

A decrease last month would extend a pattern of declines at the start of a quarter that are later reversed. Since the end of 2005, orders for non-military capital goods have dropped in the first month of a quarter in all but three instances.

The information set out herein has been obtained from various public sources and is by way of information only. Broadgate Financial can accept no liability of any sort in relation thereto and readers should obtain their own verification of any statement before making any decision which may have any financial or other impact.

Neither the information nor the opinions herein constitute, or are they to be construed as, an offer or a solicitation of an offer to buy or sell investments.