Swiss Franc Advances Amid Risk Aversion
February 10 2016 - 11:59PM
RTTF2
The Swiss franc climbed against its major rivals in European
morning deals on Thursday, as European shares declined, with miners
and bankers under pressure, amid weak corporate earnings.
The outlook over global growth darkened after the Fed Chair
Yellen warned financial conditions in the U.S. and uncertainty in
China had become "less supportive" of growth. Yellen reaffirmed her
plan to increase rates gradually, but didn't close options for more
rate hikes.
Oil prices resumed sell-off after gasoline inventories hit a
record high for a second week and Goldman Sachs repeated its
warning that crude oil futures might fall below $20 per barrel in
2016.
Figures from the Federal Statistical Office showed that Swiss
consumer prices declined at a stable pace in January, in line with
expectations.
The consumer price index fell 1.3 percent year-over-year in
January, the same rate of decrease as in December.
The figure was also matched with consensus estimate. Prices have
been falling since November 2014.
The franc showed mixed performance in Asian deals. While the
franc held steady against the euro and the pound, it rose against
the greenback. Against the yen, the franc declined.
The Swiss franc appreciated to near a 4-month high of 0.9661
against the greenback, reversing from its prior low of 0.9742. If
the franc rises further, 0.95 is likely seen as its next resistance
level.
The franc, having declined to 1.4159 against the pound at 7:30
pm ET, reversed direction and advanced to a 9-month high of 1.3925.
On the upside, the franc may test resistance around the 1.38
mark.
The franc strengthened to more than a 2-week high of 1.0950
against the euro, off its early low of 1.0992. The franc is seen
finding resistance around the 1.08 area.
On the flip side, the franc depreciated to more than a 1-year
low of 114.75 against the yen, compared to 116.39 hit late New York
Wednesday. The next possible support for the franc-yen pair is seen
around the 114.00 zone.
Looking ahead, At 6:30 am ET, Bank of England deputy governors
Jon Cunliffe and Andrew Bailey will appear at the Lords committee
on euro zone financial system in London.
In the New York session, U.S. weekly jobless claims for the week
ended February 6 and Canada new housing price index for December
are due to be released.
At 10:00 am ET, Federal Reserve Chair Janet Yellen will testify
on the Semiannual Monetary Policy Report before the Senate Banking
Committee in Washington DC.
Eurozone finance ministers will meet in Brussels later in the
day.
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