Industrial outputs in the Euro-Zone dropped another 2.0% in March after falling 2.5% in the previous month, which pushed the annual rate to a record low of -20.2% from a revised reading of -19.1% in February, The breakdown of the report showed production dropped across the board, led by a 3.1% decline in intermediate goods and a 2.8% drop in energy.
[U][B]Fundamental Headlines[/B][/U]
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[B]EURUSD[/B] – Industrial outputs in the Euro-Zone dropped another 2.0% in March after falling 2.5% in the previous month, which pushed the annual rate to a record low of -20.2% from a revised reading of -19.1% in February, The breakdown of the report showed production dropped across the board, led by a 3.1% decline in intermediate goods and a 2.8% drop in energy, and the data reinforces a weakening outlook for the region as growth prospects deteriorate at a record pace. Discuss the topic and your trade ideas in the EUR/USD Forum.
[B]GBPUSD [/B]– The Bank of England raised the outlook for inflation as policymakers forecast price growth to reach 1.5% by 2011 as a result of record-low borrowing costs and the GBP 125B in asset purchases, but went onto say that they see a risk for price pressures to hold below the 2% until 2012 as market participants continue to hold long-term expectations for higher interest rates. Moreover, the growth estimate was revised down as the central bank expects GDP to fall by 4.5% at the start of Q2, and projects the growth rate to expand 2.5% in 2011. In addition, Governor King warned that even if there is a recovery in the next 6-12 months, the outlook for sustainable long-term growth remains ‘highly uncertain’ and went onto say that ‘it is likely to take longer for bank lending to return to normal’ as policymakers expect a ‘protracted recovery.’ Overall, the comments suggests that the BoE may expand its asset purchase program as the outlook for growth and inflation remains bleak, and the uncertainty surrounding the outlook for future policy could weigh on the exchange rate over the near-term. Discuss the topic and your trade ideas in the GBP/USD Forum.