Swiss Franc Drops To 2-day Low Against Euro
In early European deals on Friday, the Swiss franc slipped to a 2-day low against the euro as Switzerland’s consumer prices continued to decline in June.
Against the currencies of U.S., U.K. and Japan, the franc pared its recent gains during this time.
Switzerland’s Federal Statistical Office said the consumer price index or CPI dropped 1% year-on-year in June, the same as in May. Meanwhile, the CPI was forecast to fall 1.1%. A year ago, the rate of inflation was 2.9% in June.
On a monthly basis, consumer prices rose 0.2% in June, unchanged from May and defying economists’ expectations for no growth.
At 5:50 am ET Friday, the franc touched a 2-day low of 1.5252 against the euro, compared to a 9-day high of 1.5175 hit at 5:20 pm ET Thursday. On the downside, 1.529 is seen as the next target level for the Swiss currency. At yesterday close, the euro-franc pair was quoted at 1.5189.
The Eurostat said today that retail sales in the Euro zone declined 3.3% year-on-year in May, faster than a revised 2.5% drop in the preceding month. Economists expected sales to fall 2.7%.
Month-on-month, retail sales were down 0.4% in May, reversing a 0.1% rise in the preceding month. Economists expected a drop of 0.1%.
The Swiss franc declined after reaching highs of 88.77 against the yen and 1.0833 against the dollar at 2:55 am ET Friday. Currently, the franc is trading at 1.0893 against the dollar and 88.10 against the yen, compared to yesterday’s close of 1.0849 and 88.47, respectively. If the Swiss currency slides further, it may likely target 87.5 against the yen and 1.102 against the dollar.
The Swiss franc jumped to 1.7734 against the pound before losing ground at 4:00 am ET Friday. At present, the pound-franc pair is trading near yesterday’s close of 1.7785. The next downside target level for the franc is seen at 1.785.
Data released by the Bank of England showed today that the housing equity withdrawal was minus GBP8.1 billion in the first quarter of 2009.
“The negative figure implies that individuals injected a net total of GBP8.1 billion into housing equity in the first quarter,” the central bank said in a statement.
Economists were looking for a figure of minus GBP9 billion. The fourth quarter figure was revised to a minus GBP7.8 billion from a minus GBP8 billion initially estimated.
Financial markets are closed in the U.S. today in observance of the ‘Independence Day’.
