The Euro to Swiss Franc (EUR/CHF) exchange rate advanced by around 0.33% on Friday morning.
With the Eurogroup meeting in Riga yet to conclude, the shared currency advanced versus many of its major peers. This is due to speculation that the meeting will bring the situation in Greece much closer to resolution. Additional gains can be attributed to positive German economic data.
The Swiss Franc, meanwhile, softened whilst Swiss National Bank (SNB) officials make speeches at the Bern annual meeting. The declination is likely a result of traders expecting the officials to talk down the Franc in order to devalue the currency.
The Euro to Swiss Franc (EUR/CHF) exchange rate is currently trending in the region of 1.0365.
Yesterday…
The Euro to Swiss Franc (EUR/CHF) exchange rate softened by around -0.24% on Thursday morning.
Although German and Eurozone PMI data printed poorly, German Consumer Confidence data reached the highest level since 2001 which caused the shared currency to advance versus many of its most traded currency rivals. Aiding the appreciation was news that the Greek government had arrested a high-profile tax dodger.
The Swiss Franc, meanwhile, advanced versus the majority of its most traded currency competitors in response to positive trade balance data. The appreciation has been somewhat sluggish, however, after the Swiss National Bank (SNB) subjected more deposits to negative rates in the hopes of making the ‘Swissie’ (CHF) less desirable.
The Euro to Swiss Franc (EUR/CHF) exchange rate is currently trending in the region of 1.0371.
Euro (EUR) Exchange Rate Edges Higher on German Consumer Confidence
On the whole, European economic data produced disappointing results on Thursday. German Composite, Services and Manufacturing PMIs all failed to meet with expectations. In addition, Eurozone Composite, Services and Manufacturing PMIs didn’t equal the median market forecast figures.
However, German Consumer Confidence rose from 10.0 to 10.1 in May, the highest level since 2001. ‘Income expectations continued to rise, but economic expectations and consumers’ willingness to spend fell slightly,’ market research company GfK said in a statement.
The common currency also gained after the Greek government arrested a high-profile tax dodger who has been on the radar for some time. This has eased fears that Athens is not doing all it can to meet with reform expectations.
The Euro to Swiss Franc (EUR/CHF) exchange rate dropped to a low of 1.0330 today.
Swiss Franc (CHF) Exchange Rate Gains despite SNB Intervention
After the SNB stated that it will expand sight-deposit accounts to negative rates, the Franc declined significantly. ‘The SNB is clearly attempting to make holding the Franc less desirable,’ said Peter Rosenstreich, head of market strategy at Swissquote Bank SA in Gland, Switzerland. ‘I don’t think these moves will reverse the Franc strength. A small haircut pales in comparison to depreciation in the Euro or potentially worse if Greece defaults.’
‘Today’s decision incrementally increases the total balance of sight deposits subject to a negative rate,’ Geoffrey Yu, a senior currency strategist at UBS in London, wrote in an e-mailed report. ‘Overall, in terms of scale, today’s move is a very marginal easing step, but the SNB clearly displayed ongoing vigilance regarding inflows, appreciation pressure on the Franc, and ultimately stand ready to act without notice should conditions deteriorate.’
The Franc recovered some of its losses on Thursday, however, after trade balance data printed positively. The Swiss Trade Surplus increased from 2.32 billion to 2.52 billion in March, bettering the median market forecast of a drop to 2.12 billion. This was as a result of Exports gaining by 1.2% and Imports cooling by -2.4%.
Euro to Swiss Franc (EUR/CHF) Exchange Rate Forecast to Hold Losses
With a lack of influential data to curb the trend, the Euro to Swiss Franc (EUR/CHF) exchange rate is likely to hold losses for the remainder of Thursday’s European session. Friday ought to see EUR/CHF volatility with several SNB officials talking at the Bern Annual Meeting. German economic data may also impact upon the pairing.
The Euro to Swiss Franc (EUR/CHF) exchanged rate advanced to a high of 1.0402 today.
