Swiss Franc Declines Against Most Majors
July 06 2015 - 7:53AM
RTTF2
The Swiss franc drifted lower against most major counterparts in
European deals on Monday, as Switzerland's consumer prices
continued to decline in June, while the Swiss National Bank's sight
deposit rose last week, raising speculation of possible SNB
intervention to stem the currency's appreciation.
Figures from the Federal Statistical Office showed that the
consumer price index dropped 1.0 percent year-over-year in June,
slower than May's 1.2 percent decrease. Prices have been falling
since November last year.
Data from the central bank showed that total sight deposits rose
CHF 457.87 billion in the week ended July 3, up from CHF 456.58
billion a week earlier. An increase in sight deposits is seen as a
signal of central bank intervention in foreign exchange markets to
weaken the franc.
The upward pressure on the franc would intensify, as Greece's
rejection of austerity measures in a referendum on Sunday could
strengthen the appeal of the safe-haven assets, the Swiss economy
minister Johann Schneider-Ammann told Le Temps in an interview.
The SNB would decide independently about the conduct of
additional foreign interventions, he added.
Meanwhile, the European markets are trading in red, as Greek
people overwhelmingly rejected proposals by international creditors
in Sunday's referendum.
The franc has been trading higher in the Asian session, due to
Greek uncertainty.
After climbing to a 1-week high of 1.0351 against the euro at
the beginning of today's deals, the franc edged down to 1.0456 and
has stabilised shortly thereafter. The franc is likely to find
support around the 1.05 zone.
The franc fell to a 4-day low of 0.9465 against the greenback,
off its previous high of 0.9407. Next possible support for the
franc may be located around the 0.97 level.
The franc, which rose to 1.4646 against the pound at 6:00 pm ET,
weakened to 1.4725. Continuation of the franc's downtrend may lead
it to a support around the 1.50 area.
On the flip side, the franc has been steady against the yen in
European deals, trading at 129.93, off early 1-1/2-month low of
128.96.
Looking ahead, Markit's U.S. services PMI and ISM
non-manufacturing composite index for June are due in the New York
session.
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