Switzerland Slips Into Recession, Reinforcing Weakening Outlook for Growth and Inflation
Economic activity in Switzerland contracted the most since 2004 as the GDP reading showed that the economy shrank 0.3% during the fourth quarter, while the growth reading for the previous quarter was revised down to -0.1% from an initial reading of 0.0%, which confirmed that the economy has fallen into its first recession in six years.
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CHFUSD – Economic activity in Switzerland contracted the most since 2004 as the GDP reading showed that the economy shrank 0.3% during the fourth quarter, while the growth reading for the previous quarter was revised down to -0.1% from an initial reading of 0.0%, which confirmed that the economy has fallen into its first recession in six years. The breakdown of the report showed an 8.1% drop in exports as global trade conditions deteriorate, while firms continued to scale back on spending, which lead business investments to drop 3.1% during the quarter. As the outlook for the export-driven economy remains bleak, mounting growth fears could lead the SNB to adopt unconventional measures to stimulate the economy as the benchmark interest rate remains close to zero. For more news and resources, visit the new Swiss franc Currency Room.
EURUSD – The German wholesale price index fell another 0.4% in January, after posting a 3.2% decline in the previous month, which reinforces the European Central Bank’s dovish outlook for price growth. Meanwhile, the annualized figure slipped -5.9% from the previous year, which is the largest decline since March 1987, and as price pressures continue to falter, the ECB is likely to ease policy further as price growth falls well below the 2% target for inflation. Discuss the topic and your trade ideas in the EUR/USD Forum.
GBPUSD – The building activity in the U.K. weakened further in February as the construction PMI plunged to a record low of 27.8 from 34.5 in previous month amid expectation for a drop to 34.2. The data continue to highlight the dire state of the U.K. housing sector, which accounts for nearly 6% of the economy. Meanwhile, a separate report showed that the U.K. Treasury plans to spend 13 billion Pounds in government sponsored building project to stimulate the housing industry however, increased turmoil in the banking sector paired with a weakening outlook for growth and inflation will continue to weigh on the real economy as economists expect Europe’s second largest economy to face its economic slump since World War II. Discuss the topic and your trade ideas in the GBP/USD Forum.
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