Swiss Franc Climbs Amid Risk Aversion

01:24, 26th October 2016

(RTTNews) - The Swiss franc climbed against most major counterparts in early European deals on Wednesday, as falling oil prices and some disappointing U.S. corporate earnings sapped investors' appetite for risk.

Oil held on to its overnight losses after API data showed a larger-than-expected build in U.S. crude stockpiles. Data from American Petroleum Institute showed an inventory build of 4.8 million barrels last week, larger than expected, and following a 3.8 million draw in the previous week.

Investors are skeptical over the proposed output cut by the OPEC at November meeting, amid disagreement among oil producing nations.

The Energy Information Administration will release official inventories data later in the day.

Apple posted its first decline in annual sales and profit in 15 years and technology giants 3M and Caterpillar reported weak earnings reports, dragging down stocks.

The franc showed mixed performance in the Asian session. While the franc fell against the euro and the yen, it rose against the pound. Against the greenback, it held steady.

The franc advanced to a 6-day high of 0.9913 against the greenback, off its early low of 0.9958. If the franc extends rise, 0.98 is likely seen as its next resistance level.

The franc was trading higher at 105.10 against the Japanese yen, up from previous low of 104.62. The franc is seen finding resistance around the 107.5 region.

Survey data from the Shoko Chukin Bank showed that Japan's small business confidence strengthened in October.

The small business sentiment index rose to 48.3 from 47.7 in September. The index strengthened for the second consecutive month.

The Swiss currency rose back to 1.0820 against the euro, from an early low of 1.0836. The next possible resistance for the franc is possibly seen around the 1.06 mark.

Survey report by research group GfK showed that German consumer confidence is set to weaken to a 7-month low in November as weak global growth is expected to affect the domestic activity.

The forward-looking consumer sentiment index fell to 9.7 from 10.0 in October.

Although the franc edged up to 1.2084 against the pound at 2:55 am ET, it reversed direction in a short while. The pair was trading at 1.2105, compared to Tuesday's closing value of 1.2117.

Looking ahead, U.S. advance goods trade balance for September, wholesale inventories for September, Markit's U.S. flash PMI report for October, U.S. home sales data for September and U.S. crude oil inventories data are set to be published in the New York session.