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Swiss Franc Soft Despite Better-than-Expected Data

The Swiss franc was soft for the most part today, though it managed to log small gains versus the Australian dollar and the Japanese yen. Better-than-expected domestic macroeconomic data was unable to bolster the Swissie. Switzerland’s Federal…

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The Swiss franc was soft for the most part today, though it managed to log small gains versus the Australian dollar and the Japanese yen. Better-than-expected domestic macroeconomic data was unable to bolster the Swissie.

Switzerland’s Federal Statistical Office reported that retail sales adjusted for sales days and holidays rose by 3.1% in October from the same month of the previous year. That was a massive surprise to analysts, who were expecting just a modest gain of 0.6%.

The KOF Economic Barometer declined to 103.5 in November from 106.3 in October. Nevertheless, the actual figure was far above the median forecast of 101.0. The report commented on the result:

The barometer is thus moving towards its long-​term average, which means that the outlook for the Swiss economy remains subdued also in view of the current pandemic situation.

As for how specific sectors fared, the report explained:

The decline of the KOF Economic Barometer in November is primarily due to a bundle of indicators from the manufacturing sector and private consumption. In addition, indicators relating to foreign demand and the other services sector send a negative signal. By contrast, indicators for accommodation and food service activities, the construction industry and the financial and insurance services sector remained virtually constant.

Despite the good data, the franc was subdued today. The possible reason for the underperformance was risk appetite that limited demand for the Swissie in its role as a safe haven. Moderna announced that it is going to apply on Monday for emergency use authorization of its COVID-19 vaccine in the United States. If the application is approved, the first shots could be given as early as December 21.

USD/CHF rose from 0.9036 to 0.9061 as of 16:36 GMT today, bouncing from the session minimum of 0.9019. EUR/CHF gained from 1.0809 to 1.0826, though it has retreated from the session maximum of 1.0859. AUD/CHF opened at 0.6670, rallied to the daily high of 0.6695 but pulled back to 0.6662 later. CHF/JPY rallied from 114.84 to 115.18, though the pair has backed off from the day’s maximum of 115.64.


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