News Column

Franc Slides As Swiss PMI Hits 1-year Low

June 2, 2014

BRUSSELS (Alliance News) - The Swiss franc declined against the other major currencies in European deals on Monday, as Switzerland's manufacturing activity slowed more-than-expected in May to its lowest level since June 2013.

The manufacturing purchasing managers' index fell to 52.5 in May from 55.8 in April, a report from Credit Suisse showed today. Economists had expected a reading of 55.5.

The production index fell 2.1 points to 56.0 in May. Meanwhile, the quantity of purchases index lost 10.1 points to reach 46.6, falling into negative territory.

Improved factory activity from China and hopes easing from the European Central Bank at this week's meeting lifted up sentiment, also hurting safe-haven franc.

The franc declined to 0.8985 against the greenback, its lowest since May 28. If the franc extends slide, it may find support around the 0.904 level.

The franc slipped to a 5-day low of 1.2218 against the euro, off early high of 1.2195. On the downside, the franc is likely to face support at the 1.23 mark.

The recovery in the Eurozone manufacturing sector was slower than initially estimated in May, final data from Markit Economics showed today.

The final seasonally adjusted Markit manufacturing Purchasing Managers' Index fell to 52.2 from 53.4 in April. The flash estimate for May was 52.5.

Reversing from an early high of 1.4989 against the pound, the franc declined to a 5-day low of 1.5053. Continuation of downtrend may lead the franc to a support around the 1.51 mark.

British manufacturing activity continued robust expansion in May, led by strong growth in output, new orders and new export business, survey data from the Markit Economics and the Chartered Institute of Purchasing & Supply showed Monday.

The Markit/CIPS Purchasing Managers' Index eased to 57 from April's five-month high of 57.3

Having advanced to a 6-day high of 113.93 against the yen around 11.30 pm ET, the franc pulled down to 113.51. Next key support level for the franc lies around the 112.5 level.

Looking ahead, German preliminary CPI for May is set for release at 8:00 am ET.

Markit's final US manufacturing PMI for May, US construction spending for April and ISM manufacturing for May are slated for release in the New York session.

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Source: Alliance News

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