Swiss Franc Climbs To 1-week High Against Pound And Yen
Wednesday, the Swiss franc climbed to a 1-week high against the British pound and the Japanese yen as Swiss SVME PMI rose for the third month in June. The franc also edged higher against the US dollar, while showed weakness versus the European currency.
The Credit Suisse said the SVME purchasing mangers’ index or PMI for Switzerland rose for the third consecutive month in June, indicating that the pace of slowdown is easing. The PMI rose to 41.8 in June from 39.8 in May. That was above the expected reading of 41. However, the index still remains below the 50-mark that divides contraction and expansion.
Against the US dollar, the Swiss franc edged higher during Wednesday’s early deals. At 3:30 am ET, the franc climbed to 1.0821 against the dollar, compared to Tuesday’s closing value of 1.0865. The next upside target level for the Swiss currency is seen around 1.076. The dollar-franc pair is presently trading at 1.0842.
The Swiss currency that closed Tuesday’s North American session at 1.7885 against the British pound edged higher to a 1-week high of 1.7779 at 4:30 am ET Wednesday. If the Swiss franc gains further, 1.762 is seen as the next target level. The pound-franc pair is trading at 1.7832.
U.K.’s service sector output dropped 1.2% in the three months to April compared with the three months to January, the Office for National Statistics said today. It follows a revised 1.6% fall in the three months to March. This is the tenth consecutive three months on previous three months decrease, the ONS said.
Against the European currency, the Swiss franc showed weakness during today’s early deals. At 5:40 am ET, the euro-franc pair touched 1.5258, compared to Tuesday’s closing value of 1.5246. The pair is currently quoted at 1.5252 with 1.530 seen as the next target level.
Germany’s Federal Statistical Office announced today that the retail sales in real terms dropped 2.9% year-over-year in May, compared with a .03% fall in April, revised from 0.8% decline reported initially. Economists were looking for a decline of 1.5%. A year earlier, retail sales were up 1.4%.
Month-on-month, retail sales increased 0.4% in May, after rising 0.5% in April. Economists had expected an increase of 0.5%.
The franc that closed Tuesday’s New York deals at 88.74 against the Japanese yen rose to a 1-week high of 89.55 at 3:45 am ET Wednesday. On the upside, 89.8 is seen as the next target level for the franc. The franc-yen pair is now worth 89.44.
The yen plummeted against its major counterparts after the Bank of Japan’s quarterly Tankan survey report showed that sentiment among Japan’s largest manufacturers rose in the second quarter for the first time since December 2006.
The closely watched Tankan survey’s main sentiment index for big manufacturers improved to minus 48 in June from a record low of minus 58 in the previous quarterly survey in March. It was a smaller improvement than a market forecast of minus 43.
Traders are now likely to focus on the New York session, in which the U.S. ADP employment report and the ISM manufacturing index-both for the month of June and the pending home sales and construction spending reports for May are expected.
