New Worries Return Demand for Franc

The Swiss franc gained this week as concerns about the European indebted nations and the abysmal report about the US employment spurred investors to seek safety of the Swiss currency.
The last week was negative for the Swissie as it looked like the European debt problems have subsided for the time being, reducing need for a safe haven. Yet this week demand for safety returned with a new vigor as three main rating agencies: Standard and Poor’s, Moody’s and Fitch warned that they may consider the European indebted nations in a state of default. That caused the surge of the franc in the first half of this week.
The employment report from Automatic Data Processing Inc. reversed the trend for a short time as it has showed a strong growth of employment in the US, giving hope that the non-farm payrolls would be good too. Such outlook was wrong, as it turned out, as the payrolls was simply terrible, showing that job creation in the US stalled. The negative employment data caused a new wave of risk aversion and helped the Swiss currency to end this week with big gains, though the currency hasn’t been able to completely erase losses of the previous week.
USD/CHF went down from 0.8479 to 0.8359 this week after rising to the weekly high of 0.8519. EUR/CHF dropped from 1.2329 to 1.1925, while CHF/JPY climbed from 95.18 to 96.27.

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