German Confidence Wanes, Libor Troubles Continue

[DailyFx]

Fundamental Headlines

• NZDUSD – New Zealand’s 2 year inflation expectations rose to 2.9% from 2.7% in 1Q, as record food and energy costs continue to squeeze businesses and consumers. Meanwhile, business was less pessimistic than the prior month as 49.7% of companies saw the economy worsening, compared to 54.8% the month prior. The RBNZ is expected to keep interest rates at the record high of 8.25% as long as inflation continues to rise. For more news and resources, visit our New Zealand Dollar Currency Room.
• USDCHF – The April Swiss trade balance rose to 1.57 billion from 1.27 billion the month prior. Exports slowed as a strong Swiss Franc is making goods less competitive abroad. The US slowdown is impacting the Swiss cement industry , which is the second largest in the world. Meanwhile, the UBS consumption indicator fell to 2.179 from 2.249 as inflation diminishes consumers purchasing power. For more news and resources, visit our Swiss Franc Currency Room.
• EURUSD – German Q1 GDP final numbers were inline with preliminary readings of 1.5% quarterly and 2.6% on an annualized basis, for its fastest expansion in 12 years. Europe’s largest economy remains resilient despite the financial crisis and a strong Euro. The construction sector saw an 4.5% increase in spending as investment stepped up. Meanwhile, German consumer confidence fell to 4.9 from 5.9 in May as inflation diminishes purchasing power. Discuss the topic and your trade ideas in the EUR/USD Forum.

• Home Sales Rise in Hard-Hit Areas (link) – Wall Street Journal
• Lofty Prices For Fertilizer Put Farmers In A Squeeze (link) – Wall Street Journal
• Recession Still Likely In U.S., Says Greenspan (link) – Financial Times
• Libor Cracks Widen As Bankers Struggle With Reforms (link) – Bloomberg
• Trichet’s Inflation Aim Proves ‘Fiction” After Decade (link) – Bloomberg