Swiss Franc Climbs Amid Risk Aversion
August 25 2016 - 3:51AM
RTTF2
The Swiss franc strengthened against its most major opponents in
European deals on Thursday amid risk aversion, as oil prices fell
and investors became cautious ahead of the U.S. Federal Reserve's
annual symposium in Jackson Hole, Wyoming, that kicks off later in
the day.
Federal Reserve Chair Janet Yellen will speak on Friday at the
symposium and investors will keep a close eye on her remarks for
clues about the outlook for U.S. interest rates.
The death toll in the Italian earthquake has risen to 247
people, according to Italy's national civil protection agency. The
number of people killed are likely to rise further after several
towns were damaged by the quake.
In economic front, data from the Swiss Federal Statistical
Office showed that Swiss industrial production declined 1.2 percent
year-on-year in the second quarter.
This follows an increase of 1 percent annually in the first
quarter.
The franc showed mixed trading in the previous session. While
the currency rose against the pound, it held steady against the
greenback and the yen. Against the euro, it declined.
Reversing from an early low of 103.78 against the yen, the Swiss
franc advanced to 104.15. If the franc extends rise, 106.00 is
likely seen as its next resistance level.
Data from the Bank of Japan showed that Japan's producer prices
rose 0.4 percent on year in July.
That beat expectations for an increase of 0.1 percent following
the 0.2 percent gain in June.
The franc climbed to 0.9641 against the dollar, off its previous
low of 0.9677. The next possible resistance for the franc may be
found around the 0.95 zone.
The Swiss franc reached as high as 1.2724 against the pound,
after having fallen to 1.2818 at 8:45 pm ET. On the upside, the
franc may locate resistance around the 1.26 mark.
The Distributive Trades Survey from the Confederation of British
Industry showed that British retail sales volume increased in
August after declining in prior month.
The retail sales balance rose to +9 percent from -14 percent in
July. The score was above expectations of -12 percent.
On the flip side, the franc fell back to a 2-day low of 1.0899
versus the euro, compared to yesterday's closing value of 1.0889.
The franc is poised to test support around the 1.10 area.
Survey results from Ifo showed that German business confidence
dropped unexpectedly in August.
The business sentiment index dropped to 106.2 in August from
108.3 in July. The reading was expected to rise to 108.5.
Looking ahead, Markit's flash U.S. PMI for August, U.S. durable
goods orders for July and U.S. weekly jobless claims for the week
ended August 20 are slated for release in the New York session.
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