Swiss Franc Mixed In Trading Against Majors
Friday during early deals, the Swiss franc showed mixed trading against its major counterparts. While the franc strengthened against the dollar and the yen, it slipped against the pound. Against the euro, the franc showed choppy trading.
In economic news, KOF economic think tank said its economic barometer for Switzerland rose to minus 1.65 in June from May’s revised reading of minus 1.85. Meanwhile, economists had expected the indicator to rise to minus 1.75.
The negative reading indicates that the year-on-year growth rate of Swiss gross domestic product or GDP will remain considerably negative, but based on the latest trend, it is expected that the economy might soon reach its trough.
The Swiss franc, which closed yesterday’s trading at 1.0944 against the dollar rose to a 2-day high of 1.0866 during early deals on Friday. The next resistance level for the franc is seen at 1.077.
In early trading on Friday, the Swiss franc gained against the yen. Currently, the franc-yen pair is worth 88.20, up from Thursday’s close of 87.68. If the pair climbs further, it may likely target the 89.9 level.
The yen weakened after a government report showed that consumer prices in Japan contracted sharply in May.
Japan’s Ministry of Internal Affairs and Communications reported that the overall Consumer Price Index fell by 1.1% in May, and the Core CPI, which excludes volatile fresh food prices, also fell 1.1%.
Falling energy prices led to the lower price readings. The overall CPI for the Tokyo Metropolitan region, which is seen as a leading indicator for the national picture, contracted 1.5% in June, while Tokyo Core CPI was down 1.3%.
Against the pound, the Swiss franc weakened to 1.8008 in early deals on Friday. This may be compared to yesterday’s close of 1.7919. On the downside, 1.812 is seen as the next target level for the Swiss currency.
During early deals on Friday, the Swiss franc bounced between 1.5293 and 1.5328 against the euro. The next upside and downside target levels for the euro-franc pair are seen around 1.538 and 1.519, respectively. At yesterday’s close, the euro-franc pair was quoted at 1.5307.
Germany’s Federal Statistical Office said in a report that the import price index dropped 10.4% year-over-year in May, compared to the 8.6% fall in the previous month. This was the highest price decline since February 1987. Economists were looking for a decline of 10.3%.
On a monthly basis, import prices remained unchanged in May, after falling 0.8% in April. Economists had predicted an increase of 0.3%. Meanwhile, export prices declined 2.7% year-on-year in May, compared to the 2% drop in the previous month. Export prices dropped 0.1% compared to the preceding month.
Meanwhile, the French statistical office INSEE said in a report that the consumer confidence stood at minus 37 in June, up from minus 40 in May. Economists had expected a reading of minus 39 for June.
Investors now look forward to the North American session, in which U.S. Bureau of Economic Analysis is due to release its personal income & outlays report for May at 8:30 am ET. Economists estimate the report to show that personal income rose 0.2% and the personal spending increased 0.4% in the month.
At 10:00 am ET, the Reuters/University of Michigan’s final report on the consumer sentiment index for June is scheduled to be released. Consumer confidence is expected to rise in the month, with economists forecasting an increase in the index to 69 from the previous month’s reading of 68.7.
