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Switzerland Manufacturing Falls to Record Low as Recession Hits

Monday, 02 February 2009 11:18:47 GMT  |  David Song, Currency Analyst, Geng Chen, DailyFX Research

Manufacturing activity in Switzerland fell to a record low in January as the manufacturing PMI slipped to 35.0 from a revised reading of 36.5 in previous month, which is much weaker than the 36.0 estimation projected by economists.

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CHFUSD – Manufacturing activity in Switzerland fell to a record low in January as the manufacturing PMI slipped to 35.0 from a revised reading of 36.5 in previous month, which is much weaker than the 36.0 estimation projected by economists. The data suggests that economic activity will remained subdued throughout the coming as companies cut output and spending, the outlook for the export-driven economy may remain bleak as global trade conditions remain far from favorable. Nevertheless, as the Euro-Zone, Switzerland’s biggest trading partner, faces its first recession in over a decade, the Swiss economy is likely to follow suit, which could lead policy makers to step up their efforts in order to avoid a deepening recession. For more news and resources, visit the new Swiss franc Currency Room.

EURUSD – Manufacturing in Germany declined for the eighth consecutive month in January as the final PMI reading confirmed the decline from 32.7 to 32.0. Meanwhile, outputs in the Euro-Zone contracted for the eighth month as the final PMI reading slipped to 34.4 from an initial reading of 34.5, and the PMI release for France was revised lower to 37.9 from 38.1. The data continues to reflect a dour outlook for the European economies operating under the euro, and economic activity may weaken further throughout the year as the economy faces its first recession in a decade. Discuss the topic and your trade ideas in the EUR/USD Forum.

GBPUSD – The U.K. manufacturing PMI unexpectedly rose to 35.8 from 34.9 in December amid expectations for a 0.4-point drop to 34.5. Despite the minor improvement, economic conditions in the economy are likely to deteriorate further as turmoil in the financial market continues to weight on the real economy. Moreover, as IMF lowered their growth forecasts for the U.K., the Bank of England is widely expected to lower borrowing cost further this week in order to maintain their dual mandate to ensure price stability while fostering economic growth. Discuss the topic and your trade ideas in the GBP/USD Forum.

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