SNB board member Hildebrand says that the financial crisis could lower Switzerland’s potential output. This is a growing concern around the developed world with concerns expressed by a number of central bankers, key among them the BOE’s King. The gap between potential out put and real output is the output gap, what we layman refer to as “slack” in the economy.
Markets are quiet with the greenback waffling on somewhat stronger footing but well off the session’s best levels.
EUR/USD trades at 1.4673, GBP/USD at 1.6192 and USD/JPY at 92.07.