The Swiss Franc has weakened to its lowest level in a month against the Euro after economic data showed that the 17-nation Eurozone pulled itself out of recession in the second quarter of the year, dampening demand for the safe haven Franc.
The Franc dropped against all of its most traded peers earlier in Wednesday’s session as German and French GDP data exceeded economist forecasts. It was the improvement in those two economies that helped drag the whole Eurozone out of its record long recession.
This slightly more positive data is welcome, but there is no room for any complacency whatsoever,” EU Economic and Monetary Affairs Commissioner Ollie Rehn said in a blog post. “A sustained recovery is now within reach, but only if we persevere on all fronts of our crisis response.”
The data dented demand for the safe haven Franc as risk sentiment improved. With economists likely to favour the improving Eurozone pressure is likely to mount on the Franc.
Swiss Franc traders should aware of the possibility that the Swiss National Bank may soon decide to remove the EUR/CHF 1.20 price floor. Initially, these measures were enacted to stall gains in the rapidly appreciating Swiss franc, prevent deflation and provide a means for keeping the country’s export-driven economy from falling into recession.
SNB Vice President Jean-Pierre Danthine hinted that the price floor will be removed once interest rate conditions in the country begin to normalise. Removal of the floor is likely to send the Franc to long-term highs against the Euro.
Current Swiss Franc (CHF) Exchange Rates
Swiss Franc/ Euro Exchange Rate is currently in the region of: 0.8121
Swiss Franc/US Dollar Exchange Rate is currently in the region of: 1.0801
Swiss Franc/ Pound Sterling Exchange Rate is currently in the region of: 0.6983
Swiss Franc/ Australian Dollar Exchange Rate is currently in the region of: 1.1801
(Correct as of 11:35 am GMT)
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