The Swiss franc is weakening against multiple currency rivals on Tuesday as the trade surplus narrowed in October. The currency also took a hit based on a gloomy outlook for the nationâs ailing manufacturing sector. With the central bank reiterating its support for currency intervention, the francâs haven appeal may diminish in the coming months.
According to the Federal Customs Administration, the trade surplus declined from an upward revised $3.08 billion in September to $2.41 billion in October. Last month, exports tumbled 5.3% to $19.53 billion and imports slipped 2.4% to $17.12 billion.
On Tuesday, precision machine maker Mikron announced that it would lay off 25 workers because of weak demand for its products from the automobile industry. The move reflects the countryâs reliance on supplying manufacturing output in other nations.
This comes as Swissmem, an association of the manufacturing and electrical engineering sectors, offered a bearish outlook for its 1,100 member businesses. The report noted that new orders received fell b 13.2%, turnover slumped by 3.7%, and exports dropped by 1.4%.
Deloitte also released a survey of chief financial officers at 103 Swiss companies, which discovered that most respondents anticipate a recession in the eurozone.
Meanwhile, the Swiss National Bank (SNB) reaffirmed that it is ready to purchase foreign currency to support its ultra-loose monetary policy. SNB Governing Board member Andrea Maechler noted that the central bank needs to ânavigate these obstaclesâ after the franc reached its highest level against the euro last month, suggesting that negative interest rates could be here for as long as it is necessary.
Our monetary policy has to navigate these obstacles in order to ensure appropriate monetary conditions for the Swiss economy. We remain willing to intervene in the foreign exchange market as necessary.
The USD/CHF currency pair rose 0.07% to 0.9902, from an opening of 0.9897, at 16:48 GMT on Tuesday. The EUR/CHF climbed 0.15% to 1.0974, from an opening of 1.0956.
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