Forex news notes a new set of data from the World Trade Organisation (WTO) which says the global economy has "lost momentum". The WTO sees a slowdown in global trade growth this year to 3.7percent, from 5percent in 2011. Commenting on the WTO findings, the organisation’s director general Pascal Lamy (pictured) pointed out how more than three years have passed since the trade collapse of 2008-09, “but the world economy and trade remain fragile. The further slowing of trade expected in 2012 shows that the downside risks remain high,” said Lamy, who added we are “not yet out of the woods.”

Lamy was at pains to stress that while the WTO has so far deterred economic nationalism, the sluggish pace of recovery raises concerns that a steady trickle of restrictive trade measures could gradually undermine the benefits of trade openness. “It is time to do no harm. WTO members should turn their attention to revitalizing the trading system and to ensuring such a scenario does not materialize,” Lamy insisted.

The WTO also predicts that developing economies will again lead trade growth throughout 2012, with a 5.6 percent increase forecast in merchandise exports, compared with 2 percent for developed nations. After two consecutive years of sluggish growth, the WTO see trade recovering in 2013, with volumes - preferred by the organisation rather than values for its assessment to avoid distortions caused by changes in commodity prices or exchange rates - seen expanding 5.6 percent. The prediction for 2012 assumes global output growth of 2.1 percent, down from 2.4 percent last year. Risks to that forecast include a steeper-than-expected downturn in Europe, financial contagion related to the European debt crisis, surging oil prices and geopolitical risks, the WTO said.

The forecasts for both 2012 and 2013 are below the long- term average of 6 percent for the period from 1990 to 2008. In general, from a forex news perspective, today is witnessing extending FX market gains against the USD and JPY under ranging bias: The view seems to support the market rally and foreign currencies upticks in recent days, consistent with range trading, bolstered by the absence of any particularly key European and U.S. news to drive the gains.

We now need to look ahead to Friday’s potential market moving Chinese GDP, industrial output, retail sales figures as the event horizon to challenge range-trading. A nice big surprise from China might offer up a bit of markets direction to drive sentiment toward a more sustained FX move.

Drew Hillier. Editor