The KOF leading indicator for Switzerland plunged to -1.41 in February, which is the lowest level since the series began in 1991, while the reading for January was revised down to -0.93 from an initial reading of -0.87. The data continues to highlight a weakening outlook for the Swiss economy as growth prospects deteriorate at a record pace.
[U][B]Fundamental Headlines[/B][/U]
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[I]• Darling Forces RBS to Give Up U.K. Tax Relief on Loss[/I] – Bloomberg
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CHFUSD[/B] – The KOF leading indicator for Switzerland plunged to -1.41 in February, which is the lowest level since the series began in 1991, while the reading for January was revised down to -0.93 from an initial reading of -0.87. The data continues to highlight a weakening outlook for the Swiss economy as growth prospects deteriorate at a record pace, and conditions are likely to deteriorate further over the year as trade conditions falter. As the Euro-Zone, Switzerland’s biggest trading partner, faces a deepening recession, the outlook for the export-driven economy remains bleak, which could lead the SNB to adopt unconventional measures to stimulate the economy as the benchmark interest rate remains close to zero. For more news and resources, visit the new Swiss franc Currency Room.
[B]EURUSD[/B] – Price pressures in the Euro-Zone weakened further as the consumer price index reached its lowest level since the euro was introduced in 1999. Price growth fell 0.8% in January, which lowered the annual rate of inflation to 1.1% from 1.6% in previous month, which was driven by a 0.9% drop in energy prices. Meanwhile, the core CPI dropped to 1.6% from 1.8% in December. On the other hand, price pressure in Germany unexpectedly accelerates for the first time in six months as the preliminary CPI reading for February rose to 1.0% from 0.9% in previous month. Despite the minor uptick in inflation, price growth remains far below the ECB’s 2% target, which should allow the European Central Bank to lower borrowing cost further next week. Finally, a separate report showed that the unemployment rate in the euro-region increased for the fifth consecutive to 8.2% from a revised reading of 8.1% in December, which was slightly higher than the 8.1% forecast held by economists. Discuss the topic and your trade ideas in the EUR/USD Forum.
