The IMF has hiked its forecasts for Euro zone GDP. 2009 will contract 4.2%, up from an earlier -4.8% forecast while 2010 will be flat. Previously the IMF saw a 0.3% decline in 2010.
Earlier today, IMF managing director Strauss-Kahn said that the global recovery would come three months earlier than forecast, helping spark the risk-loving environment we’ve seen in today’s markets.
EUR/USD is adding to gains after the IMF news and now trades at 1.4526. It could get unruly above 1.4550, traders warn.
UPDATE: On the downside, the IMF warns that EZ unemployment will rise above 10% next year and 12% in 2011.
