Germany Explores a Greek Default, Euro Regains 1.36

German government explores consequences of a Greek default and the possibility of a Greece exit from the Eurozone. EURUSD rebounds from under $1.35; Italian Industrial production fell. FOMC member fisher speaks on monetary policy. Ashraf's Premium Trades will be be posted ahead of London Lunch.

Eurozone data continue to disappoint as Italian Industrial production fell 0.7% in July after dropping 0.8% a month earlier. On annual basis production fell 1.6% from 0.1% and worse than expected growth of 0.2%.

According to German magazine Der Spiegel, the German government is exploring consequences of a Greek default as well as the possibility of a Greece exit from the Eurozone. German experts believe such a situation would be manageable. This increases the credibility of the news that started to circulate on Friday that Greece is about to default. Until now, the German government showed a strong opposition towards the possibility of a Greek bankruptcy. However, over the weekend, Greek Prime Minister Papandreou approved new measures in order to avoid default and keep the euro.

In the event of a default by Greece, attention will be particularly focussed on the big three French banks in particular, with ratings agency Moody’s potentially priming themselves to pull the trigger on a ratings downgrade, as early as this week, after putting them on review in June.

G7 meeting ended with no objections to Japanese Finance minister Azumi’s intentions to take bold action should he consider yen moves excessive and disorderly. This could mean a higher chance of an intervention as BOJ, or Ministry of Finance to be precise, would not be internationally criticized for a unilateral action.

Earlier in Asia, The August minutes from the Bank of Japan rate meeting last week showed that policymakers were agreed on the need to increase the set of stimulus measures to show that they were serious about the need to loosen monetary policy to weaken the yen and help boost the economy. Business sentiment amongst large manufacturers also improved from -23.3 in the quarter for April/June at 10.3 for the latest quarter though concerns remained about the effect the strong yen was having on exports.

No data at the NY session.

Dallas Fed president Richard Fisher delivers a speech at the National Association of Business Economists in Dallas at 4:00 pm ET. The volatility could increase as Q&A session is expected.

**** DETAILS ON ASHRAF's SEP 14 WEBINAR ****

Join Ashraf for an All-Star FX Webinar; For the First and Possibly Only Time ever, the most Respected Experts in the Retail Forex Industry are coming together to give you 5 Days Worth of Expert Education and Advice. Not only is the $25 admission price a BARGAIN , but part of the proceeds will also go to Doctors Without Borders and an Orphanage in Africa . Ashraf's session is on September 14 7 AM - 8 AM ET / 11 GMT - 12 GMT .

FOR MORE DETAILS, click here: http://bkforexadvisors.infusionsoft.com/go/FX1234/Alaidi