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The United States, Canada and Switzerland reported negative GDPs

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The Swiss Franc, Canadian dollar and American dollar were all affected by the weak reports of the GDP. Switzerland’s real gross domestic product in the first quarter of 2015 fell by 0.2% because of the negative growth contributions delivered by the trade balance in goods and services and the slowdown reported on the production side. The Swiss Franc depreciated, but EURCHF keeps its bearish outlook, while USDCHF may continue to develop the positive correction in the short term.

Canada’s economy also shrank by 0.2%, the largest contraction since the 2009 recession as the fall in oil prices seriously affected the economy. In its last speech, Bank of Canada Governor Stephen Poloz seemed to be prepared for moderated growth, but not a negative figure. He’s still confident regarding the results of the second quarter. Another failure of the Canadian economy may result in a cut of the actual 0.75% interest rate. The news gave more momentum to the fresh ascending tendency of the USDCAD currency pair.

The American Preliminary GDP was probably the most awaited report as it showed that the economy shrank at a 0.7% seasonally adjusted annual rate in the first quarter. The main reasons for this result seems to be the bad weather, the strong dollar and the plunging investment in oil exploration. Officials are confident that the decline is temporary as they prepare for an interest rate hike by the end of the year. The American dollar remains strong in front of its peers.

After the last Friday’s positive episode of the oil quotations, prospects have turned negative because of the OPEC’s rumors which threaten to keep high its production after rising it in May. Next to that, Iraq warned of an increase in production and Iran is seriously preparing for entering the export market. These fundamental aspects bring downside risks for the prices at least in the short term (the next couple of trading sessions), while also impacting the long term outlook.

Greece missed a self-imposed Sunday deadline for reaching an agreement with its lenders, fact that may affect the euro in the following days. On Friday, Greece will have to deal with the deadline for a 300 million euro payment to the IMF. Markets are aware of the bankruptcy scenario, but traders still hope for a last-minute solution.

In China the factory sector continued to expand, but exports are still falling, fact that is worsening prospects for the future. The Manufacturing PMI was reported in line with expectations, at 50.2 points, the Non-Manufacturing PMI index slightly decreased to 53.2 points and the HSBC Final Manufacturing PMI was also published as expected, to 49.2 points. The import tariffs were reduced, measure entering effect starting today, in an attempt to stimulate the consumer demand, but analysts expect a limited impact.

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