The Swiss franc dropped today as the declining retail sales and the PMI spurred the speculation that Switzerland’s economy is losing steam.
The retail sales fell 0.9 percent in September from a year ago after declining 0.8 percent in August. The actual reading was nowhere near the forecasts of a 2.3 percent growth. The SVME PMI was at 46.9 in October, while the index was at 48.2 in the previous month. Economists hoped for a smaller drop to 47.8.
The franc is more dependent on the Swiss economy now after the central bank pegged the currency to the euro. The bank made such move to prevent negative impact of a strong currency on the nation’s exporters, but it looks like harm was already done and the economic growth is faltering in Switzerland.
USD/CHF was at 0.8865 as of 1:25 GMT after opening at 0.8869 today and reaching 0.8958 (the highest rate since October 20) yesterday. CHF/JPY traded near 88.17 after falling on yesterday’s session from 89.16 to 88.30. GBP/CHF traded at about 1.4160, following the advance from 1.4090 to 1.4144 on the previous trading session. The currency pair touched 1.4261 yesterday, that was the highest price since October 20.
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