Franc Mixed as Market Sentiment Stabilizes, Domestic Data Supports

The Swiss franc was mixed today, rising against some currencies, staying flat versus others, and crashing against the US dollar and the Japanese yen. The market sentiment was stabilizing following yesterday’s risk aversion, limiting the appeal of safe currencies. Domestic macroeconomic data was positive and helpful to the Swissie.
Markets started the week in a risk-off mode due to escalating tensions between the United States and Iran. But fears have started to wane rather quickly, and today investors were hopeful that the countries will be able to avoid a full-blown war. That was negative to the franc, which tends to profit from fears and risk aversion.
Switzerland’s Federal Statistical Office reported that the Consumer Price Index was unchanged in December from the previous month. Market participants were expecting the same 0.1% decline as in November. Year-on-year, the CPI rose by 0.2%. The average inflation rate was 0.4% in 2019.
Released on Friday by Procure, the manufacturing Purchasing Managers’ Index rose to 50.2 in December from 48.8 in the previous month. It was a positive surprise as specialists were predicting a small drop to 48.7. Being above the 50.0 level of no-change, the indicator showed that the industry returned to growth after eight months of decline.
USD/CHF jumped from 0.9679 to 0.9718 as of 16:47 GMT today. GBP/CHF was little changed at 1.2753. NZD/CHF dropped from 0.6456 to 0.6438, retreating from the daily maximum of 0.6472.

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