Swiss Franc Rebounds on Improved Economic Sentiment, Global Cues

The Swiss franc is rebounding on Thursday after being the worst performing major currency in April. Posting huge losses against some of its most publicly traded rivals, the franc is taking a breather and recording modest gains towards the end of the trading week. With very little domestic economic data, the franc is taking its direction on global cues.

The Switzerland Economic Sentiment Index, a gauge of investor outlook, came in at -7.7 this month, a 19.2-point increase from the -26.9 in March. This is the best reading since July 2018 as survey participants anticipating the economic slowdown to soon reach a conclusion.
Also, the Zew Economic Sentiment Index, an assessment of the present economic situation, climbed from 33.3 last month to 40.7 in April.
Recently, the Swiss National Bank (SNB) released its first-quarter results and the central bank reported a profit of $30.1 billion, suggesting that volatility in its immense balance sheet is driving the SNB’s earnings. According to the Q1 numbers, the SNB enjoyed a profit of $30.1 billion on its foreign currency positions, nearly $1 billion in gold holdings, and roughly $500 million in its Swiss franc positions.
This is in stark contrast to last year’s $7 billion loss.
Ultimately, the figures show that everything is relatively calm when it comes to monetary policy. This suggests that the central bank may not need to intervene anytime soon, especially with the franc weakening as much as it has over the last month.
Without any further domestic data coming out until next week, investors are taking cues from global markets. The next time traders have something to look forward to will be at the beginning of May when retail sales and manufacturing numbers are published. The market consensus is that retail sales will have declined and there will be an improved sentiment for manufacturing next month.
The USD/CHF currency pair tumbled 0.03% to 1.0205, from an opening of 1.0201, at 18:19 GMT on Thursday. The EUR/CHF fell 0.21% to 1.1362, from an opening of 1.1384.

If you have any questions, comments, or opinions regarding the Swiss Franc, feel free to post them using the commentary form below.

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