Risk Aversion, Better-than-Expected GDP Unable to Help Swiss Franc

The Swiss franc was surprisingly soft today even though the deadly coronavirus infection continued to spread across the globe, spooking investors and increasing demand for safe-haven assets. Positive macroeconomic reports released in Switzerland on Monday and Tuesday did little to help the currency. The Swissie was soft against almost all currencies, except for the Canadian dollar, which fell today despite rising prices for crude oil, and the US dollar, which collapsed after an emergency interest rate cut from the Federal Reserve.
Switzerland’s Federal Statistical Office reported that gross domestic product rose by 0.3% in the fourth quarter of 2019 after rising by 0.4% in the third quarter. The actual reading was better than an increase of 0.2% envisioned by analysts. The report commented on the result:

Exporting industries lost momentum, while growth was underpinned by the domestic economy. Switzerland thus mirrored the international development.

Procure.ch reported that the manufacturing Purchasing Managers’ Index climbed from 47.8 in January to 49.5 in February — the highest level since March 2019. Analysts were expecting the index to stay about the same. Yet the report was not entirely positive, saying:

The increase in the index is partly attributable to longer suppliers’ delivery times, which is not a good sign in the current environment.

Meanwhile, the deadly disease known as COVID-19, which originated in the Chinese province of Wuhan, continued to spread outside of China. While the number of new confirmed cases in China itself was the lowest since reports started to being collected in January, the number of new cases outside of China continued to grow, South Korea, Iran, and Italy were the most notable centers of contagion. But the grim news did little to provide support to the Swissie.
USD/CHF fell from 0.9585 to 0.9557 as of 21:36 GMT today, and its daily low of 0.9515 was the lowest level since March 2018. EUR/CHF advanced from 1.0674 to 1.0683. CHF/JPY dropped from 112.88 to 112.09. CAD/CHF tumbled from 0.7191 to 0.7138.

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