Fundamental Headlines
• Obama Pushes New Stimulus – Wall Street Journal
• Senate Leaders Reach 'Broad' Health Pact – Wall Street Journal
• Japan unveils $80.6bn stimulus plan- Financial Times
• Dubai Corporate Bond Rout Shows Mounting Concern That Defaults Will Spread-Bloomberg
• Geithner Said to Be Seeking $700 Billion TARP Extension Until Next October -Bloomberg
USD/CHF – Swiss unemployment remained at a five year high of 4.1% on a seasonally adjusted basis with the base rate rising to 4.2% from 4.0%. The Swiss economy returned to growth in the third quarter with GDP advancing 0.3% as exports grew by 2.6%. However, concerns over the potential for demand to falter as a strong Franc has made Swiss goods more expensive, have discouraged companies from adding to their payrolls. The Swiss National Bank will hold their policy meeting tomorrow and is expected to keep their target libor rate at 0.25%. Policy makers may also hint at possible intervention in an effort to weaken the local currency in order to stimulate demand for exports.
GBP/USD – The U.K. visible trade balance deficit widened to 7.1 billion pounds from 6.9 billion pounds as imports outpaced exports. The increase in demand from Britons could be a sign that the economy is recovering reinforcing expectations that growth will return in the fourth quarter. Indeed, Chancellor Darling in today’s pre-budget report stated that growth will return by the turn of the year with expectations of a 1.0%-1.5% advance in 2010. The Chancellor would also pledge that the government will maintain support until the economy recovers with promotion of long -term growth as their goal. However, he also cautioned that inflation could rise to 3.0% early next year which will make the BoE’s decision more difficult in determining future monetary policy. The central bank is expected to keep rates and their asset purchase program on hold at tomorrow’s [policy meeting. To discuss this and other ideas visit the GBP/USD forum.
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.
Learn forex trading with a free practice account and trading charts from FXCM.
