Swiss Franc Gains Despite Falling Economic Expectations

The Swiss franc gained yesterday and remained little-changed today against the US dollar and the euro even as economic expectations were worsening. The currency traded sideways versus the Japanese yen.
The ZEW-CS Indicator of economic expectations for Switzerland sank as much as 17.8 points to 2.2 in May. The report said that “last month’s significant gains are lost and the indicator falls back to the level of March 2013”. Meanwhile, the Swiss Producer Price Index ticked up 0.2 percent in April.
Fritz Zurbruegg, Member of the Swiss National Bank Governing Board, said in an interview to L’Hebdo newspaper yesterday about the cap on the franc:

The floor rate will remain in force as long as necessary to carry out our mandate of maintaining price stability. The current exchange rate still seems overvalued.

USD/CHF fell from 0.9668 to 0.9646 yesterday (falling from the high of 0.9746 — the highest since August 20) before trading at 0.9654 as of 00:12 GMT today. EUR/CHF was at 1.2429 after dropping from 1.2489 to 1.2430. CHF/JPY was flat at 105.84.

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