European Commission: Euro zone seen shrinking 4% in 2009

The European Commission has updated a bunch of economic forecasts. Sees euro zone economy shrinking -4.0% in 2009, before recovering to 0.1% growth in 2010. These are sharp downward revisions from January 19 forecasts of -1.9% and +0.4% in 2010.

Sees euro zone unemployment at 9.9% in 2009 and then 11.5% in 2010 (ouch!!!). Inflation is seen at 0.4% in 2009 and then 1.2% in 2010.

EUR/USD continues heavy, presently at 1.3265. Support 1.3245/50.