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Switzerland Cuts Economic Outlook, Govt. Announces New Stimulus Measures.
(RTTNews) - Wednesday, the Swiss government lowered its economic outlook for 2009 and lunched new set of measures to address the recession.
The State Secretariat for Economic Affairs or SECO said gross domestic product or GDP may fall 2.7% this year and by 0.4% next year. It was down from its previous forecast of a 2.2% contraction for this year and a slight recovery of 0.1% for 2010.
Consumer prices are forecast to decline 0.5% this year and may increase 0.9% in the coming year. In the March report, the government had forecast a 0.2% fall for this year and a rise of 1% for the next year.
Further, the forecast for the jobless rate in 2009 is kept untouched at 3.8%, while revised to 5.5% from 5.2% for the next year.
On the same day, the government announced new stimulus measures worth 400 million Swiss francs to fight rising unemployment. It brought overall measures of the third economic package to 750 million francs. The new measures include temporary employment in non-profit organizations, subsidies for training programmes and internships in government institutions.
The government also approved 200 million francs last month in subsidies for health insurance and 150 million francs in tax reductions.
Copyright(c) 2009 RTTNews.com, Inc. All Rights Reserved
News are provided by InstaForex in partnership with RTT.
Thursday during early deals, the U.S. dollar showed mixed performance against its major counterparts. While the recovered its Asian session's loss against the euro and the pound, it pared gains against the yen and the franc. The dollar rose from a 3-day low against the euro and jumped to a 9-day high against the pound.
Traders now look forward to the New York session, in which the Labor Department is due to release its customary weekly jobless claims report for the week ended June 13th at 8:30 am ET.
The results of the Philadelphia Federal Reserve's manufacturing survey are due out at 10 am ET. Economists expect the diffusion index of current activity to show a reading of -17 for June.
At the same time, the Conference Board is scheduled to release a report on the U.S. leading index for May . The consensus estimate calls for a 0.9% increase in the leading indicators index for the month.
The dollar gained against the euro after falling to a 3-day low of 1.3992 at 3:20 am ET Thursday. The euro-dollar pair that closed yesterday's trading at 1.3947 reached 1.3908 by about 4:55 am ET. The near term resistance level for the dollar is seen at 1.383.
Italy's trade deficit decreased to EUR277 million in April from EUR1.02 billion in the previous year, the country's statistical office ISTAT said today. Economists expected a deficit of EUR250 million.
Exports dropped 28.7% year-on-year to EUR23.9 billion, while imports declined 30% to EUR24.2 billion. Month-on-month, on a seasonally adjusted basis, exports fell 2.9% and imports were down 3.9%.
At 5:25 am ET Thursday, the dollar reached a 9-day high of 1.6191 against the pound, moving up from an Asian session low of 1.647. If the dollar strengthens further, it may likely target the 1.581 level.
A report from the Office for National Statistics showed an annual decline of 1.6% in the U.K. retail sales volume in May. Economists had expected only 0.4% fall in sales. From April, retail sales volume unexpectedly decreased 0.6%, as economists were looking for a 0.3% rise.
Meanwhile, the Bank of England said in a preliminary report that the M4 money supply grew 16.6% year-over-year in May, slower than the 17.4% increase in April. Economists had expected an increase of 17.3%.
On a monthly basis, the M4 money supply rose 0.2% in May, marking the same pace as in the previous month. Economists were looking for an increase of 0.7%.
The dollar jumped to 1.0831 against the Swiss franc before losing ground at 1:10 am ET Thursday. Currently, the dollar-franc pair is worth 1.0769, down from yesterday's close of 1.0802. The next target level for the pair is seen at 1.065.
The Swiss National Bank left its three-month libor target range unchanged at 0-0.75% as expected. In other words, the bank kept its key interest rate unchanged at 0.25%.
The central bank said in a statement that it will continue to provide the economy with a generous supply of liquidity and to purchase Swiss franc bonds with the aim of reducing risk premia on long-term bonds issued by private sector borrowers. The SNB also said it will take firm action to prevent an appreciation of the Swiss franc against the euro.
The dollar soared to 96.10 against the yen by about 3:00 am ET Thursday. Thereafter, the dollar dropped and touched 95.64 at 4:55 am ET and this may be compared to Wednesday's close of 95.71.On the downside, 95.53 is seen as the next target level for the U.S. currency.
News are provided by InstaForex in partnership with RTT.
The International Monetary Fund or IMF may raise its 2010 growth outlook for the world economy in the coming weeks, reflecting some improvements in global economic conditions, IMF's First Deputy Managing Director John Lipsky said Friday. He called for forceful policies to tackle the financial sector stress and continued international collaboration to ensure signs of economic improvement lead to a sustained global recovery.
In a keynote address to Turkish Industrialists' and Businessmen's Association in Bodrum, Lipsky said, "Financial conditions have improved, confidence is recovering gradually, and indicators of future production and demand have firmed. Reflecting these developments, I expect that in the coming weeks we will revise our growth projections modestly upward, mainly with regard to 2010."
However, he warned that given the worldwide increase in unemployment, it is far too early to conclude that the goal of restoring global growth has been accomplished.
While noting that recent indicators have signaled a slowdown in economic contraction, Lipsky said the timing and pace of the global economic recovery remains uncertain.
In April, the IMF had forecast that the global economy will contract by 1.3% in 2009, the deepest recession since the World War II. The economy is then expected to grow by 1.9% in 2010. The IMF is due to announce its updated forecasts for the world economy on July 7.
However, Lipsky said, "Even the upbeat indicators widely cited as representing "green shoots" still point to a global recovery that would be sluggish by historic standards."
He said activity in the advanced economies will revive only gradually over the course of 2010, weighed down by financial deleveraging, limited credit growth, weak household income growth and declining household net worth. Emerging economies are unlikely to return to trend growth while advanced economies are still underperforming. As a result, output gaps and unemployment rates in most economies likely will continue rising through 2010, Lipsky said.
In this context, he said, it should be clear that in most cases, continued strong policy actions will be needed during the remainder of this year and into 2010 in order to insure that economic activity begins a sustained improvement.
He stressed that robust growth will not be achieved until continuing financial sector problems are addressed forcefully. He noted that recent bank stress tests in major advanced economies, especially in the United States and the United Kingdom, have represented a significant step toward rebuilding market confidence and attracting new private capital.
Copyright(c) 2009 RTTNews.com, Inc. All Rights Reserved
News are provided by InstaForex in partnership with RTT.
Euro Slides To Multi-day Lows Against Most Majors.
(RTTNews) - The European common currency lost ground against its major rivals on Monday morning in Asia. The euro slumped to multi-day lows against most of them.
Traders are looking forward to the seasonally adjusted Italian industrial orders report for April and the German IFO business climate report for June in the upcoming session.
The euro fell to a 5-day low of 0.8444 against the pound around 9:10 pm ET and the pair is presently worth near 0.845. If the euro slips further, support is seen at the 0.843 level. At Friday's close, the euro-pound pair was quoted at 0.8458.
Latest report from the property website Rightmove showed that the average property asking price in the U.K. eased 0.4% month-over-month in June to 226,436 pounds. Annually, the asking price fell a steeper 5.5%.
Retreating from last week's winning streak, the euro fell to a 4-day low of 133.19 against the Japanese yen by 9:50 pm ET. The euro-yen pair that closed Friday's trading at 134.34 is presently quoted at 133.56 and the next downside target for the pair is seen at the 132.3 level.
The yen gained across the board after the Ministry of Economy, Trade and Industry report showed today that Japan's tertiary industry activity index rose 2.2% month-over-month in April following an upwardly revised 2.8% decline in the previous month. Economists had expected 2.3% growth for the month.
The euro also slipped to a 4-day low of 1.5056 against the Swiss franc around 5:35 pm ET. This may be compared to last week's close of 1.5079. On the downside, the euro-franc pair may likely target the 1.504 level.
Pulling back from Friday's weekly high of 1.4013, the euro declined to 1.3887 against the US dollar by 9:25 pm ET. The euro-buck pair that closed last week's deals at 1.3958 is presently trading at 1.3915.
With little first-tier economic data to consider, attention will likely turn to US Federal Reserve's interest rate decision on Wednesday. Analysts expect the FOMC will retain its base rate at 0.25 percent.
Copyright(c) 2009 RTTNews.com, Inc. All Rights Reserved
News are provided by InstaForex in partnership with RTT.
Euro Shows Mixed Trading Against Majors.
(RTTNews) - Friday, the European currency climbed to a 2-day high against the US dollar and the Japanese yen. On the other hand, the euro pared its Asian session gains against the British pound, while showed choppy trading versus the Swiss franc.
In economic news from Europe, Germany's Federal Statistical Office said in a report that the import price index dropped 10.4% year-over-year in May, compared to the 8.6% fall in the previous month. This was the highest price decline since February 1987. Economists were looking for a decline of 10.3%. On a monthly basis, import prices remained unchanged in May, after falling 0.8% in April. Economists had predicted an increase of 0.3%.
Meanwhile, the French statistical office INSEE said in a report that the consumer confidence stood at minus 37 in June, up from minus 40 in May. Economists had expected a reading of minus 39 for June.
Also, the French statistical office INSEE confirmed a 1.2% sequential contraction for its economy in the first quarter. At the same time, the statistical agency revised the figure for the fourth quarter to show a fall of 1.4% from a 1.5% contraction reported initially.
A report by France's Ministry of Labor and Employment showed today that the number of unemployed persons increased by 1.5% or 36,400 in May from the preceding month. Year-on-year, the number of unemployed persons increased by 26.4%. During the month, there were 2,543,100 unemployed persons.
Against the US dollar, the European currency edged higher during early deals on Friday. At 6:45 am ET, the euro-dollar pair reached a 2-day high of 1.4092, compared to 1.3989 hit late New York Thursday. If the pair gains further, 1.424 is seen as the next target level.
The single currency lost ground after hitting a high of 0.8573 against the British pound at 1:15 am ET Friday. The euro-pound pair is currently trading at 0.8539 with 0.843 seen as the next target level. The pair closed Thursday's North American session at 0.8548.
The 16-nation currency largely bounced between 1.532 and 1.529 against the Swiss franc during today's early deals. The euro-franc pair is now worth 1.5307, compared to Thursday's closing value of 1.5304.
KOF economic think tank said its economic barometer for Switzerland rose to minus 1.65 in June from May's revised reading of minus 1.85. Meanwhile, economists had expected the indicator to rise to minus 1.75.
Against the Japanese yen, the euro traded higher during Friday's early deals. At 2:40 am ET, the euro-yen pair hit a 2-day high of 134.96, compared to yesterday's closing value of 134.26. The next upside target level for the pair is seen around 137.2.
Japan's consumer prices dropped sharply in May compared to the year-ago period, mainly due to lower prices for utilities, transport and communication, official data showed today.
Data released by the Ministry of Internal Affairs and Communications said consumer prices fell 1.1% year-on-year in May, coming in line with economists' estimate, after a 0.1% drop in the previous month. Consumer prices declined for the fourth consecutive month in May.
Japan's index of all industry activity dropped 9.9% year-on-year in April, slower than a 11.9% fall in the preceding month, the Ministry of Economy, Trade and Industry said today. The index has been declining on an annual basis continuously since March 2008.
Traders are now likely to focus on the North American session, in which the U.S. Bureau of Economic Analysis is due to release its personal income & outlays report for May at 8:30 am ET. Economists estimate the report to show that personal income rose 0.2% and the personal spending increased 0.4% in the month.
At 10:00 am ET, the Reuters/University of Michigan's final report on the consumer sentiment index for June is scheduled to be released. Consumer confidence is expected to rise in the month, with economists forecasting an increase in the index to 69 from the previous month's reading of 68.7.
Copyright(c) 2009 RTTNews.com, Inc. All Rights Reserved
News are provided by InstaForex in partnership with RTT.
The greenback, which slumped to multi-day lows against most majors just before the release of the US Commerce Department report on personal income, started trending higher following the report. As of now, the dollar is trading at 95.42 against the Japanese yen, 1.0847 versus the Swiss franc, 1.6491 against the pound and 1.4083 against the euro.
The report showed that personal income jumped 1.4 percent in May following an upwardly revised 0.7 percent increase in April. Economists had expected income to rise 0.3 percent compared to the 0.5 percent growth originally reported for the previous month.
Additionally, the Commerce Department also said that personal spending rose 0.3 percent in May after coming in unchanged in the previous month. The moderate increase in spending came in line with economist estimates.
Copyright(c) 2009 RTTNews.com, Inc. All Rights Reserved
News are provided by InstaForex in partnership with RTT.
U.K. House Prices Rise For Second Straight Month.
(RTTNews) - Tuesday, the Nationwide Building Society said house prices in the U.K. rose 0.9% in June from the prior month, following a 1.3% increase in May. On a yearly basis, house prices were down 9.3% versus May's 11.3% decline. The price of a typical house totaled GBP 156,442 in June.
Martin Gahbauer, Nationwide's Chief Economist said, "If the pattern of price movements seen in the first half of the year is repeated over the second half, then prices could show only a small single digit fall for 2009 as a whole."
In the second quarter, all regions see moderation in annual rate of price decline. For U.K. as a whole, house prices rose 1.1% between first and second quarter. House prices were down 11.7% annually, slower than the 16.5% fall seen in the first quarter.
News are provided by InstaForex.
Tuesday in Asia, the U.S. dollar and the Japanese yen plummeted against their key counterparts as hopes of an economic recovery increased risk appetite to buy higher-yielding assets.
The dollar and the yen are viewed as safe-haven currencies and tend to attract buying when worries about the global economy and financial markets flare up, but can come under pressure when such concerns recede.
Asian stock markets are broadly higher today, taking their cue from gains on Wall Street with energy stocks buoyed by a continued rise in crude oil prices.
Japan's Nikkei 225 was up 1.9%, Australia's S&P/ASX 200 was 1.5% higher, Korea's Kospi Composite Index was up 0.8%, Hong Kong's Hang Seng was up 1.4%, China's Shanghai Composite was 0.1% higher and Taiwan shares were up 0.9%.
Japan's Nikkei average rose 1.9 percent today, and briefly it hit 10,000 as surging crude prices boosted trading houses such as Mitsubishi Corp., which deal in oil, amid growing optimism that economic recession may be easing.
The 225-issue Nikkei Stock Average gained 184.57 points, or 1.89 percent, from Monday to 9,968.04 in the morning session after briefly touching 10,000.30. The benchmark index last topped the 10,000 line on June 15, logging an intraday high of 10,126.55.
The broader Topix index of all First Section issues on the Tokyo Stock Exchange was up 14.32 points, or 1.56 percent, to 929.64.
Stock market gains are fueling risk appetite in the currency markets, sending the euro, aussie and kiwi higher.
Sentiment in Japan was helped by news that household spending in May rose 0.3% on year, up for the first time in 15 months, and beating expectations for a 1.5% decline.
But that was tempered by the release of the May jobless rate, which rose to 5.2%, the highest since September 2003, from 5.0% in April. Analysts had expected an increase of 5.1% for May.
The job-to-applicant ratio came in at a record low of 0.44, compared to forecasts for 0.45 after the 0.46 level in April.
But the number of employed persons rose from 63.22 million in April to 63.42 million in May. The job participation rate was 60.5 percent, up from 60.4 percent a month earlier.
The Organization for Economic Cooperation and Development last week forecast Japan's jobless rate will rise to an unprecedented 5.8 percent in 2010.
In Asian trading on Tuesday, the yen fell to a 2-week low of 159.97 against the pound. This may be compared to yesterday's close of 159.15. If the yen weakens further, it may likely target the 162.6 level.
The yen has declined 4% against the pound after it reached a 3-week high of 154.13 on June 23.
The yen tumbled to a 15-day low of 135.97 against the euro during Asian deals on Tuesday. The next downside target level for the Japanese currency is seen at 138. At yesterday's close, the euro-yen pair was quoted at 135.32.
The euro gained 1% against the yen yesterday after a report showed that the Euro-zone economic sentiment rose more than expected in June.
The economic sentiment indicator rose to 73.3 from an upwardly revised reading of 70.2 recorded in May. Meanwhile, economists had expected the index to rise to 71 from May's initially reported reading of 69.3.
Against the Swiss franc, the yen slipped to a 6-day low of 89.14 in Asian deals on Tuesday. On the downside, 89.8 is seen as the next target level for the yen. The franc-yen pair was worth 88.80 at Monday's New York session close.
After hitting a 1-month high of 86.89 against the franc on June 24, the yen has been declining and it has lost more than 2% thus far.
The dollar also weakened today on optimism the global slump is waning, reducing the currency's appeal as a refuge.
During Asian deals on Tuesday, the dollar plunged to 1.6663 against the pound. This set the lowest level for the dollar since June 03. If the dollar slides further, it may likely target a new multi-month low of 1.70. The pound-dollar pair closed yesterday's trading at 1.6567.
The pound rose as U.K. consumers became much more upbeat about the economy's prospects over the next 12 months in June, boosting the overall measure of confidence for the fourth time in five months.
Consumers seem to believe that the measures taken by the government and the Bank of England to support the economy are likely to work, and indicating that they in turn won't cut back on spending as sharply as many economists had expected.
Polling firm GfK NOP said today that the headline measure of consumer confidence rose to -25 in June from -27 in the previous month. The index was in line with economists' expectations. At the same time, the index came in better than the minus 34 registered in June last year.
The dollar plummeted to a 7-month low of 1.6666 against the pound on June 03. Although the dollar gained thereafter, it pulled back again after reaching a 12-day high of 1.5805 on June 08.
However, the pound-dollar pair largely bounced between 1.6212 and 1.6623 for the past two weeks, but the pair moved off the range today.
The dollar slumped to a 4-day low of 1.0802 against the Swiss franc and a 6-day low of 1.4133 against the euro in Asian deals on Tuesday. If the dollar drops further, it may likely target 1.065 against the franc and 1.418 against the euro. The euro-dollar pair closed trading at 1.4089 and the dollar-franc pair at 1.0823 on Monday.
Extending yesterday's 1% gain, the dollar surged up against the yen in today's early Asian deals and reached a 5-day high of 96.33 at 8:05 pm ET. But the dollar fell thereafter and the pair is currently trading at 95.69, down from yesterday's New York session close of 96.06. The near term support level for the U.S. currency is seen at 95.1.
Traders are now likely to focus on the European session, in which the Swiss May UBS consumption indicator, French May PPI, German June unemployment rate, Euro-zone M3 money supply for May and CPI for June, Italian CPI for June and PPI for May, U.K. final first quarter GDP estimate and current account reports are expected.
From the U.S., the S&PCase-Shiller home price index for April and the consumer confidence report for June are due in the North American session.
News are provided by InstaForex.
German May Retail Sales Decline Further.
Wednesday, Germany's Federal Statistical Office announced that the retail sales in real terms dropped 2.9% year-over-year in May, compared with a 0.3% fall in April, revised from 0.8% decline reported initially. Economists were looking for a decline of 1.5%. A year earlier, retail sales were up 1.4%.
Month-on-month, retail sales increased 0.4% in May, after rising 0.5% in April. Economists had expected an increase of 0.5%.
For the first five months of the year, retail sales grew 2.3% compared to the same period of the previous year.
In nominal terms, retail sales dipped 3.2% year-on-year in May, compared with a 0.4% fall in April, revised from 0.9% drop estimated initially. On a monthly basis, retail sales were up 0.5%, after rising 0.9% in April. During the January to May period, retail sales were up 2.4% over a year ago.
News are provided by InstaForex.