Swiss Franc Climbs Amid Risk Aversion
October 26 2016 - 1:24AM
RTTF2
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.
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