Swiss Franc Climbs Amid Risk Aversion
27 October 2016 - 7:02PM
RTTF2
The Swiss franc advanced against its most major opponents in
European trading on Thursday amid risk aversion, as weak earning
updates from companies such as ABB, ASM International and
Telefonica and slowing profit growth in China industrial firms
lured the appeal of the safe-haven assets.
Figures from the National Bureau of Statistics showed that
China's industrial profits increased at a slower pace in September,
rising 7.7 percent on year in September after expanding 19.5
percent in August.
Amid heightened expectations for an U.S. interest rate hike
before the end of the year, traders await the latest data on U.S.
durable goods and pending home sales later in the day and Friday's
growth figures for further clues to the U.S. economic outlook and
monetary policy.
Oil prices held flat after falling more than 1 percent overnight
as doubts over OPEC's proposed output cut deal overshadowed the EIA
report showing a surprise weekly drawdown in crude stockpiles.
The currency showed mixed performance in the Asian session.
While the franc rose against the pound and the yen, it held steady
against the greenback and the euro.
The Swiss franc climbed to 1.0827 against the euro, from a low
of 1.0841 hit at 3:45 am ET. Continuation of the franc's uptrend
may lead it to a resistance around the 1.06 zone.
Data from the European Central Bank showed that Eurozone money
supply grew at a slower pace in September.
M3 expanded 5 percent year-on-year in September following a 5.1
percent rise in August. Economists had forecast the rate to remain
at 5.1 percent.
The franc reversed from an early low of 0.9947 against the
greenback, edging higher to 0.9914. The franc is seen finding
resistance around the 0.98 mark.
The franc spiked up to near a 2-week high of 105.62 against the
Japanese yen, following a decline to 104.93 at 11:30 pm ET. The
next possible resistance for the franc-yen pair is seen around the
107.00 zone.
On the flip side, the franc has fallen to a 2-day low of 1.2183
against the pound at 4:30 am ET, and held steady since then. The
pair was valued at 1.2164 when it finished Wednesday's trading.
Preliminary data from the Office for National Statistics showed
that the U.K. economy expanded more than expected in the third
quarter.
Gross domestic product climbed 0.5 percent sequentially in third
quarter, faster than the expected growth of 0.3 percent.
Looking ahead, U.S. durable goods orders for September, U.S.
weekly jobless claims for the week ended October 22, and U.S.
pending home sales data for September are set to be published in
the New York session.
At 1:00 am ET, European Central Bank board member Yves Mersch is
expected to speak at the Hachenburg Conference organised by
Hochschule der Deutschen Bundesbank in Hachenburg, Germany.
Later in the day, a number of EU commissioners and finance
ministers are scheduled to meet to discuss Brexit, migration and
economic growth at Globsec Tatra Summit in Bratislava.
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