News Column

Swiss Franc Overlooks Disappointing GDP Data

February 26, 2014

David Maycotte

Talking Points:

  • Swiss 4Q GDP 0.2% q/q vs. 0.4% Expected
  • Franc Little-Changed After Data Release
  • SNB Sees Slow Inflation Rise Through 2015

  • Swiss GDP disappointed in the fourth quarter, showing the economy expanded 0.2 percent from the previous period to yield the smallest gain in over two years. The year-on-year growth rate unexpectedly slowed to 1.7 percent from a revised 2.1 percent in the third quarter.

    The Swiss Franc showed a muted response to the release as Switzerland's low inflation continues to plague policymakers. The Swiss National Bank foresees its baseline inflation rate below 1 percent through, and well below its 2 percent target rate through the next two years. DailyFX Strategist Ilya Spivak argues that this translates into policy standstill for the time being, eroding the GDP report's market-moving potential.

    USD/CHF 5-Minute Chart. February 27, 2014

    Swiss_Franc_Overlooks_Disappointing_GDP_Data_body_Picture_1.png, Swiss Franc Overlooks Disappointing GDP Data

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    Source: DailyFx

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