News Column

Franc Advances As Swiss Trade Surplus Improves

August 21, 2014



BRUSSELS (Alliance News) - The Swiss franc strengthened against its major rivals ahead of the European session on Thursday, as Switzerland's trade surplus increased notably in July.

Data from the Federal Customs Administration showed that Swiss trade surplus rose to CHF 3.98 billion in July from CHF 1.4 billion in June.

Exports grew only 0.2% in July from June, when it surged 6%. Meanwhile, imports plunged 10.2%, reversing the 10.8% increase in June.

Traders look ahead to Fed Chair Janet Yellen's speech on the labor market at the Kansas City Federal Reserve Bank's economic symposium in Jackson Hole, Wyoming on Friday after the July FOMC minutes suggested the US central bank may be closing in on the schedule for normalizing interest rates.

While some members made the case for a "relatively prompt" rate hike based on the economy's progress, most Fed officials are of the view that the central bank should be patient before hiking rates, the Fed minutes released yesterday showed.

The franc recovered to 0.9126 against the greenback, after falling to a 7-month low of 0.9145 in prior deals. The pair was worth 0.9092 when it closed deals yesterday.

Rebounding from an early 2-day low of 1.2115 against the euro, the franc edged up to 1.2105. The franc is likely to find resistance around the 1.205 area.

The franc advanced to 1.5134 against the pound, following a decline to 1.5166 at 8:55 pm ET. Next key resistance for the franc may be eyed around the 1.51 region.

The franc hovered at more than a 5-week high of 113.69 against the yen. On the upside, 114.6 is seen as the next possible resistance level for the franc-yen pair.

Looking ahead, UK retail sales and public sector borrowing for July, as well as PMIs from major European economies are due in the European session.

Eurozone flash consumer confidence index for August is to be released at 10:00 am ET.

The US weekly jobless claims for the week ended August 16, existing home sales and leading indicators for July are set for release in the New York session.



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Source: Alliance News


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