The Dutch government think tank CPB says the Dutch economy is expected to shrink 4.75% this year due to a slump in world trade and less consumer spending. CPB had previously forecast a contraction of -3.5%.
The think tank warns “The credit crisis and the global recession may well continue for longer than expected in the presented projection. There is also a risk of falling prices and wages (deflation) owing to the very deep recession.”
Also “In light of the precarious situation new problems in the financial sector are a real possibility.”
Back with EUR/USD. The pairing has settled back to 1.3900 at writing having topped out at 1.3923 post ZEW release.
