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No Need for Safety, Franc Becomes Less Attractive

July 1, 2011 at 18:02 by Vladimir Vyun

Swiss francThe Swiss franc dropped today against other most-traded currencies as signs of the global economic recovery and the positive changes with the debt situation in the Eurozone reduced demand for safer assets.

Ulrich Leuchtmann, the head of foreign-exchange strategy at Commerzbank AG, explained his opinion about the recent weakness of the franc:

The Swissie was quite a good safe-haven currency, especially if you wanted to flee the euro because of its short- term risks. With the short-term risks in the euro zone having abated, this shift should be unwound. We’ll see a weaker Swissie as long as we have no more event risk from the euro zone.

The ISM Manufacturing PMI rose from 53.5 in May to 55.3 in June, showing the 23rd consecutive month of the US manufacturing growth. The Markit Eurozone Manufacturing PMI was unchanged from the preliminary estimate of 52.0 in June, falling from 54.6 in May. The SVME PMI was down by 5.7 point to 53.4 in June, indicating a sharp slowdown of business activity in Switzerland.

USD/CHF climbed from 0.8402 to 0.8486 today as of 18:02 GMT and reached the intraday high of 0.8525 earlier. EUR/CHF advanced from 1.2186 to 1.2316. CHF/JPY dropped from 95.83 to 95.25.

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

2 Responses to “No Need for Safety, Franc Becomes Less Attractive”

  1. Edward Camilleri

    Hello! I will be travelling to Switzerland at the end of August and so need to change from Euros to CHF. (I almost exchanged money at the worst time of the past days, since I panicked!!) Pls do you think I should wait a few more weeks, or has the situation stabilised regd strength of CHF vs Euro?! Thanks! Edward

  2. Andrei Moraru

    I am short on EUR/CHF, so I’d exchange euros to francs now.

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