By FX Empire.com
As we expected the EUR/CHF maintained the downside bias with the favor seen for the Swiss Franc as the debt woes intensified and fears of contagion spread to other major economies in the euro area.
The biggest downside pressure on the euro on Wednesday was the abysmal bond sale from Germany, its worst in the euro history where the low yield on the 10-year German bund did not compromise with the risk seen that Germany might endure more main with the deepening recession risk and the deepening debt crisis where Germany sold only 3.6 billion of the 6.0 billion offer!
Fears are spreading to big nations and France remains the top pick, Fitch also warned that the worsening outlook could cost France its AAA rating which came inline with prevailing fears that talks with Dexia means the nation might endure more pressure and accordingly risk its rating.
We can see the crisis expanding with only the flow of bad news and no solutions proposed on the table to at least shore up confidence leaving the euro defenseless for now. We still expect more volatility and choppy trading on Thursday with more weak macroeconomic data from the euro zone while the absence of US markets will pressure the trading volumes that might even extend the volatility.
Germany will start the session at 06:00 GMT with the GDP figures for the third quarter in a final reading, where the seasonally adjusted quarterly GDP is expected unchanged at 0.5%, while the working-day adjusted GDP index is expected at 2.6%. In addition, the domestic demand index for the third quarter is expected unchanged at 0.4%, while exports are expected to expand by 1.7% from 2.3%.
At 09:00 GMT Germany will release the IFO survey for November, where the business climate indicator could have retreated to 105.2 from 106.4, while the current assessment indicator could have declined to 115.2 from 116.7, in the time expectations indicator could ease to 96.0 from 97.0.
Originally posted here
