Swiss Franc Declines On Risk Appetite, Falling Consumer Prices
August 05 2015 - 4:38AM
RTTF2
The Swiss franc lost ground against its major counterparts in
European morning deals on Wednesday, after the nation's consumer
prices slipped further in July and amid risk appetite due to strong
corporate earnings.
Figures from the Federal Statistical Office showed that the
consumer price index dropped 1.3 percent year-over-year in July,
faster than June's 1.0 percent decrease. Economists had expected
the index to fall 1.0 percent. Prices have been falling since
November last year.
On a monthly basis, consumer prices declined 0.6 percent in
July, in contrast to 0.1 percent rise in the preceding month. It
was first fall in three months.
Upbeat reading on China's services sector eased fears over the
health of the world's second-largest economy. The closely watched
Caixin Services Purchasing Managers' Index climbed to an 11-month
high of 53.8 in July, up from 51.8 in June, day showed early in the
day.
The currency showed mixed performance in the previous session.
While the franc held steady against the yen and the pound, it
advanced against the euro. Against the greenback, the franc
declined.
In European trading, the franc depreciated to 126.91 against the
yen for the first time since April 30. This marks a 0.1 percent
decrease from Tuesday's closing value of 127.07. The franc-yen pair
is likely to find support around the 126.00 zone.
The franc fell by 0.17 percent to hit 0.9798 against the
greenback, its lowest since April 13. At Tuesday's close, the pair
was valued at 0.9781. Continuation of the franc's downtrend may
take it to a support around the 0.985 level.
The franc fell to 1.5264 against the Sterling, a level not seen
this year. If the franc continues slide, it may challenge support
around the 1.54 mark.
The Swiss currency pared gains to 1.0645 against the euro, from
an early high of 1.0621. On the downside, 1.075 is possibly seen as
the next support level for the franc.
Looking, U.K. services PMI for July and Eurozone retail sales
for June are due to be released shortly.
In the New York session, U.S. private sector jobs data for July,
trade balance for June, U.S. services PMI for July and Canada trade
data for June are slated for release.
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