Daily Forex Fundamentals | Written by DailyFX | Nov 03 08 13:10 GMT |

European Manufacturing Falters, Stoking Increased Fears of a Global Recession Fundamental Headlines Rescue Cash Lures Thousands of Banks - Wall Street Journal UAW Vies to Be Central Player in GM-Chrysler Deal - Wall Street Journal Panasonic in talks on Sanyo Electric takeover - Financial Times Commerzbank to Tap German Rescue Fund; SocGen Profit Drops 84% - Bloomberg HSBC Defies Brown Call to Pass on Full U.K. Rate Cut - Bloomberg EURUSD - Manufacturing in the Euro-Zone contracted for the fifth consecutive month, while the final PMI reading edged lower to a record low reading of 41.1 from an initial reading of 41.3. In addition, manufacturing activity in Germany fell for the third straight month to reach its lowest level on record as the index plunged to 42.9 from 47.4 in September. Meanwhile, European Commission lowered the 2009 growth forecast to 0.1% following an initial estimate of 0.9%. The bigger than expected decline in production paired with the dour outlook has certainly heightened fears that the European economy may slip into a recession by the end of the year, and has raised bets that the European Central Bank will indeed deliver another 50bp rate cut this week. GBPUSD - U.K. manufacturing contracted for the sixth consecutive month, but pulled back from the record low reading of 41.0 to hold at 41.5 in October. Despite the unexpected improvement, the growth outlook for Europe’s second largest economy remains bleak as the U.K. slipped into a recession during the second half of the year, and conditions may only get worse as economic activity throughout the global economy deteriorates. Meanwhile, the British pound may face increased selling pressures later this week as the Bank of England is widely expected to lower the benchmark interest rate by 50bp to 4.00%. USDCHF - Manufacturing activity in Switzerland contracted for the second straight month as fears of a global recession pushed firms to cutback on production. The SVME index slipped to 47.0 from 47.8 in September, but crossed the wires much stronger than the 45.3 estimate held by economists. Despite the better than expected reading, economic activity may weaken further over the coming months as growth prospects for the entire world deteriorate. Meanwhile, concerns of a severe downturn in the economy has already spurred bets that the Swiss National Bank will opt to lower the benchmark interest rate further in order to stave off further downturns in the economy, which could limit buying pressures for the Swiss franc in the near-term. DailyFX Disclaimer Investment in the currency exchange is highly speculative and should only be done with risk capital. Prices rise and fall and past performance is no assurance of future performance. This website is an information site only. Accordingly we make no warranties or guarantees in respect of the content. The publications herein do not take into account the investment objectives, financial situation or particular needs of any particular person. Investors should obtain individual financial advice based on their own particular circumstances before making an investment decision on the basis of the recommendations in this website. While we try to ensure that all of the information provided on this website is kept up-to-date and accurate we accept no responsibility for any use made of the information provided. All intellectual property rights are the property of Daily FX. Daily FX and its affiliates, will not be held responsible for the reliability or accuracy of the information available on this site. The content herein is provided in good faith and believed to be accurate, however, there are no explicit or implicit warranties of accuracy or timeliness made by Daily FX or its affiliates. The reader agrees not to hold Daily FX or any of its affiliates liable for decisions that are based on information from this website. Daily FX highly recommends that before making a decision, the reader collects several opinions related to the decision and verifies facts from at least several independent sources.