Trading remained thin in European session as investors await the FOMC meeting. WTI crude oil price fell to 74.3 after yesterday's rally amid expectations that a weak US recovery would dampen demand outlook. Gold stayed firm at around 1280 despite rally in peripheral European bonds after auctions, suggesting underlying strength in the precious metal.
Releases of Switzerland trade balance and UK's net borrowing data failed to move the market much. Trade surplus in Switzerland narrowed to CHF 0.57B in August from a downwardly revised CHF 2.84B in the prior month. The market had anticipated a milder contraction of CHF 1.97B. The Swiss franc was, however, lifted after the KOF Research Institute raised the country's growth forecasts. The KOF raised its GDP growth forecasts to +2.7% for 2010 and +1.8% for 2011, from +1.8% and +1.6% respectively. Unemployment rate is anticipated to fall to 3.2% in the coming year. In the UK, budget deficits surprisingly widened to the highest level since the record began in 1993. Net borrowing soared to 15.3B pound from 13.5B pound a year ago.
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