Swiss Franc Strengthens On Risk Aversion
December 17 2019 - 3:13AM
RTTF2
The Swiss franc gained ground against its key counterparts
during European trading on Tuesday amid risk aversion, as European
shares fell on concerns over a hard Brexit.
Fears over a hard Brexit rekindled after ITV News reported that
British Prime Minister Boris Johnson was taking a hard line on
Britain's transition period for leaving the European Union.
Johnson could use his huge parliamentary majority to make an
amendment to the Withdrawal Agreement to make it illegal for the
transition period to be extended beyond December 2020.
The amendment ensures that the so-called transition period will
end on December 31, 2020, setting stage for a clash with the
EU.
The franc held steady against its major counterparts in the
Asian session, except the pound.
The franc rose to more than a 3-month high of 0.9803 versus the
greenback and more than an 8-month high of 111.79 against the yen,
off its early lows of 0.9844 and 111.33, respectively. If the franc
rises further, 0.96 and 114.00 are likely seen as its next
resistance levels against the greenback and the yen,
respectively.
The franc rebounded to 1.0941 against the euro, from a low of
1.0968 set at 4:45 am ET. The franc may locate resistance around
the 1.06 level.
Data from Eurostat showed that the euro area trade surplus
increased in October as exports advanced from the previous month
amid a fall in imports.
The trade surplus increased to a seasonally adjusted EUR 24.5
billion from EUR 18.7 billion in September.
Extending early rally, the franc strengthened to a 5-day high of
1.2923 against the pound. At yesterday's close, the pair was worth
1.3096. The franc is seen facing resistance around the 1.27
mark.
Data from the Office for National Statistics showed that the UK
unemployment rate remained unchanged in three months to
October.
The unemployment rate was largely unchanged at 3.8 percent,
while the rate was expected to rise marginally to 3.9 percent. The
number of people out of work decreased by 93,000 to 1.28 million in
the year to October.
Looking ahead, Canada manufacturing sales for October, U.S.
housing starts, building permits and industrial production, all for
November, are set for release in the New York session.
At 12:30 pm ET, Federal Reserve Bank of Boston President Eric
Rosengren will give a speech at the Forecasters Club of New
York.
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