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KOF Economic Barometer Drops Unexpectedly, Swiss Franc Fails to Attract Demand

November 29, 2019 at 11:24 by Vladimir Vyun

10, 20, 50 and 100 Swiss franc banknotesThe Swiss franc was rather soft today, falling against some major rivals and trading flat versus others. It looked like traders felt no need to buy safer currencies despite increasing tensions between the United States and China over Hong Kong protests and their potential negative impact on chances of reaching a trade deal. Domestic macroeconomic data did not help the Swissie either as the report released today was surprisingly bad.

The KOF Economic Barometer dropped from 94.8 to 93.0 in November, reaching the lowest level since 2015. That is instead of rising to 95.1 as analysts had predicted. The report said:

The outlook for the Swiss economy remains subdued.

The worst performance was demonstrated by hotel and catering activities as well as the banking and insurance sector. Meanwhile, indicators for the manufacturing sector remained almost unchanged.

Released yesterday by the State Secretariat for Economic Affairs, Swiss gross domestic product demonstrated growth by 0.4% in the third quarter of this year, accelerating from the 0.3% pace of growth in the previous three months. That was a positive surprise to market participants as economists had promised a slowdown to 0.1%. The biggest contributors to the growth were exports of chemical and pharmaceutical products and energy. Yet the report was not entirely positive, saying:

In other areas, the impact of the subdued international environment was felt more strongly. The economic slowdown is being borne out on the whole.

USD/CHF climbed from 0.9982 to 0.9998 as of 11:23 GMT today. EUR/CHF gained from 1.0989 to 1.0101. GBP/CHF was at 1.2901, near the opening level of 1.2886.

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

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