The Swiss franc was mixed midweek as the currency was data-dependent against some of its major rivals. Investors combed through numbers that found higher-than-expected inflation, lower-than-expected manufacturing activity, and commendable retail sales figures.
According to the Swiss Federal Statistics Office (FSO), retail sales rose 0.3% in February, up from the previous monthâs 0.1% decline. They also beat market forecasts of a 0.2% drop. However, a measurement of retail sales on a year-over-year (YoY) basis was down, sliding 0.2%. This was still higher than the median estimate of a 0.6% plunge.
The Swiss manufacturing purchasing managersâ index (PMI) tumbled to 50.3 in March, from 55.4 in February. It was also lower than 55.5 the market had penciled in. Anything above 50 indicates an expansion.
Inflation came in higher than what economists had anticipated. Inflation edged up to 0.7% last month, up from Februaryâs 11-month low of 0.6%. This beat the expectations of a 0.6% boost.
Switzerland will be quiet on the data front until next week when the unemployment rate is released. The market is forecasting a jobless rate of 2.5%.
So far this year, the franc has been rallying, defying what analysts had projected at the beginning of 2019. The currency is trading at its best level against the euro in two years, gaining roughly 5% over the last 12 months. The francâs strong performance has been driven by market uncertainty amid the cooling global economy, Brexit chaos, and trade spats. This is leaving investors with an appetite for safe-haven assets, including the franc, precious metals, and Treasurys.
Financial experts believe the franc’s present trends are unsustainable, particularly if the Swiss National Bank (SNB) decides to continue easing monetary policy and cut interest rates even further.
The USD/CHF currency pair tumbled 0.06% to 0.9973, from an opening of 0.9980, at 16:14 GMT on Wednesday. The EUR/CHF surged 0.24% to 1.1211, from an opening of 1.1183.
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