Don’t assume that fiscal stimulus can be easily unwound, ECB managing board member Gonzales-Paramo says. The sharp contract of the last year brings with it permanent output loss which raises questions as to what stimulus is affordable. Projections of output growth of 2.25% from 2011 might be considered a generous assumption, he says. Not a very rosy outlook.
EUR/USD continues to give ground.My guess is that traders ahad long EUR and AUD positions heading into the data, holing the gold bugs knew something. Now that the data is out and it is a mixed bag, they are being forced to trim those longs, in EUR/USD, at least.
China was a big buyer below 1.4200 earlier this week. If they do not materialize today, it could get ugly. Bids are seen in the 1.4180/90 area and again at 1.4150.
Just picking up rumors of the SNB checking rates, presumably in EUR/CHF.
