French Consumer Spending Craters

Daily Forex Fundamentals | Written by GFT | Jan 22 09 08:40 GMT |

French consumer spending collapsed in December contracting by -0.9% versus -0.2% expected as sentiment sunk to its worst level since 1972. Despite the Christmas shopping season consumers in Europe's second largest economy kept their purse strings tightly shut as worries over the looming global recession dampened any urge to spend. The news bodes badly for the rest of the Euro-zone as France and along with Germany remains the primary engine of growth for the rest of the region. Not even the prospect of lower food and energy prices revived the spirits of French consumers who continue to conserve their cashflow in the face of escalating job losses that threaten their security. Therefore Q1 of 2009 is shaping up to be especially challenging to French retailers is likely to result in greater contraction in GDP than currently forecast. The EUR/USD however, shrugged off the news, as flow in the currency market tonight is primarily dominated by short covering and the resumption of some risk taking on the back of rebound in the Dow and a postive open in European equities. If equities continue to remain well bid the EUR/USD could make another run to 1.3100 as the day progresses Boris Schlossberg http://www.gftforex.com DISCLAIMER: GFT refers to Global Futures & Forex, Ltd. and all of its divisions, branches and subsidiaries, including Global Forex Trading and GFT Global Markets UK Limited. GFT Global Markets UK Limited is authorized and regulated by the United Kingdom Financial Services Authority. Each investment product is offered only to and from jurisdictions where solicitation and sale are lawful. Trading of foreign exchange contracts, contracts for differences, derivatives and other investment products which are leveraged, can carry a high level of risk, and may not be suitable for all investors. It is possible to lose more than the initial investment. In Australia, GFT means Global Futures & Forex, Ltd. ARBN 103 508 461, AFS Licence 226625. A Product Disclosure Statement (PDS) is available at www.gft.com.au. You should read and consider the PDS before making any decision to deal in GFT products. © 2008 Global Futures & Forex, Ltd. All rights reserved.