European Commission Lowers GDP Forecasts for Euro-Region, Inflation to Grow 0.4% This Year
The European Commission lower its growth forecast for the Euro-Zone, and expects the growth rate to contract -4.0% this year and 0.1% in 2010, while German GDP is anticipated to fall 5.4% in 2009 and 0.3% next year. In addition, economic activity in France is projects to drop 3% this year and 0.2% in 2010, while price growth in the euro-region is anticipated to fall to an annual rate of 0.4% this year
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EURUSD – Retail spending in German unexpectedly fell 1.0% in March, despite forecast a gain of 0.2%, as rising unemployment prompted consumers to scale back spending. The reading for the previous month was revised to 0.0% from an initial reading of -0.2%, and from a year earlier, sales dropped 1.5%. Meanwhile, the final manufacturing PMI reading for the Euro-Zone was revised higher to 36.8 from 36.7, while the gauge for Germany also improved to 35.4 from 35.0. Moreover, the Sentix investor confidence survey for the Euro-Zone improved for a second consecutive month in May as the index increased to -34.3 from -35.3 in the previous month, and a deeper look into the report showed that future expectation jumped to -5.25 from -12.5, while the index for current situation plunged to -59.00 from -55.25. Finally, the European Commission lower its growth forecast for the Euro-Zone, and expects the growth rate to contract -4.0% this year and 0.1% in 2010, while German GDP is anticipated to fall 5.4% in 2009 and 0.3% next year. In addition, economic activity in France is projects to drop 3% this year and 0.2% in 2010, while price growth in the euro-region is anticipated to fall to an annual rate of 0.4% this year, and the unemployment is expected to reach a staggering 11.5% next year. Discuss the topic and your trade ideas in the EUR/USD Forum.
CHFUSD – Manufacturing in Switzerland contracted at a slower pace for the first in a year as the SVME purchasing managers index rose to 34.7 from 32.6 in March. The breakdown of the report showed output increased to 32.9 from 30.3, while the reading for the backlog of orders jumped to 37.3 from 29.8, and conditions may get worse in the month ahead as trade conditions falter. As the region faces its worst economic downturn in over a quarter century while the Swiss Nation Bank expects the annual rate of growth to contract 3% in 2009, the outlook for growth and inflation remains bleak, and policymakers may step up their efforts to stimulate the economy as they pledges to stem the risks for deflation. For more news and resources, visit the new Swiss franc Currency Room.
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