Forex Flash: IMF forecast makes grim reading for Eurozone policymakers - BTMU

FXstreet.com (Barcelona) - Derek Halpenny, European Head of Global Markets Research at the Bank of Tokyo Mitsubishi UFJ notes that the release of the IMF forecast projections yesterday makes grim reading for policymakers in Europe.

While most of the downward revisions to real GDP growth in 2013 reflected weaker growth at the end of last year, halpenny sees that there were only unchanged or downward revisions to 2014 projections also, underlining the grim outlook. Elsewhere, he notes that the UK came out worst with a 0.3ppt downward revision to both 2013 and 2014 growth levels to now stand at 0.7% and 1.5% respectively. He writes, “The 0.3% contraction predicted for the Eurozone this year was not just due to the periphery and the IMF now believe there are doubts over the ability of the core to help the periphery. The scope for the euro to advance from here is very limited and we maintain that an ECB rate cut and other measures are probable. The minutes from the BOE meeting and employment data from the UK are the key events in Europe. Another 6-3 vote for unchanged policy is likely.”