Swiss Franc Hits 4-day High Against Euro
The Swiss franc rose against most majors during Tuesday’s early North American session. The franc thus advanced to a 4-day high against the euro and a 1-week high against the pound.
Switzerland’s trade surplus totaled CHF 9.9 billion in the first half of 2010, down from CHF 11.56 billion in the second half of 2009, the Federal Customs Administration reported today. In the first six months of 2009, the surplus totaled CHF 8.78 billion.
The franc-yen pair has been extending its range bound trading during Tuesday’s early New York session. As of now, the pair is trading at 82.80, compared to yesterday’s close of 82.19.
Against the pound, the franc is now trading at a 1-week high of 1.5944, compared to yesterday’s close of 1.6072. On the upside, the franc may target around the 1.584 level.
U.K.’s public sector net borrowing in June decreased to GBP 14.5 billion from a revised borrowing of GBP 17.1 billion in May, the Office for National Statistics said today. Consensus forecast was for GBP 13 billion. Also, the deficit was smaller than the GBP 14.7 billion seen in June 2009.
The public sector net cash requirement, at the same time, was GBP 20.9 billion, a GBP 0.7 billion higher net cash requirement than in June 2009, when there was a net cash requirement of GBP 20.2 billion. Further, the public sector current budget was in GBP 12.6 billion deficit in June, larger than the GBP 11.9 billion shortfall in June 2009.
The franc is now trading at a 4-day high of 1.3519 against the euro, from a 4-week low of 1.3679 hit at 2:20 am ET. The franc may target 1.338 against the euro, if it falls further. At yesterday’s close, the franc traded at 1.3656 against the euro.
Germany’s producer price index, or PPI, rose 1.7% year-on-year in June, faster than a 0.9% growth in the previous month, a report by the Federal Statistical Office showed. Producer prices increased for the third consecutive month. Economists were looking for an increase of 1.1%.
On a monthly basis, the PPI rose 0.6% in June, faster than a 0.3% growth in the previous month. The monthly producer price inflation rose for fifth straight month. Economists had expected an increase of 0.2%.
The franc rose against the U.S. dollar in early North American session on Tuesday. As of now, the franc is worth 1.0499 versus the dollar with 1.040 seen as the next upside target level. The franc was worth 1.0553 against the dollar at yesterday’s close.
The U.S. Commerce Department released a report Tuesday morning showing that housing starts fell by much more than expected in the month of June.
The report showed that housing starts fell 5 percent to an annual rate of 549,000 in June from the revised May estimate of 578,000. Economists had expected housing starts to fall to 575,000 from the 593,000 originally reported for the previous month.
At the same time, the Commerce Department said that building permits, an indicator of future housing demand, rose 2.1 percent to an annual rate of 586,000 in June from 574,000 in May. The increase surprised economists, who had expected building permits to edge down to 572,000.
