Swiss Franc Advances Amid Risk Aversion
24 March 2017 - 6:45PM
RTTF2
The Swiss franc climbed against most major opponents in the
European session on Friday amid risk aversion, as investors awaited
a key U.S. vote on healthcare plan intended to repeal and replace
the Affordable Care Act.
The vote has been postponed to Friday, after President Donald
Trump and Speaker Paul Ryan failed to close a deal with the
hard-line conservatives in the House Freedom Caucus.
President Donald Trump warned House Republican lawmakers on
Thursday that voters could punish them if they do not vote in favor
for new health-care legislation to dismantle Obamacare.
If a vote on the replacement fails, it would cast doubt on
Trump's ability to deliver on promises of increased infrastructure
spending, tax cuts and deregulation.
Data from the Swiss National Bank showed that Switzerland's
current account surplus rose 5 billion Swiss francs on year to 22
billion francs in the fourth quarter of 2016, driven by higher
surpluses in services and goods trade.
Net acquisition of financial assets grew by CHF 18 billion in
the fourth quarter, led by a surge in net acquisition in reserve
assets amounting to CHF 21 billion.
The franc dropped against its major rivals in the Asian session,
except the yen.
Reversing from an early 3-day low of 0.9959 against the
greenback, the franc climbed to a 2-day high of 0.9905. The franc
is likely to find resistance around the 0.98 region.
The franc advanced to 1.2371 against the pound, off its early
low of 1.2442. If the franc extends rise, it may challenge
resistance around the 1.22 mark.
Data from British Bankers' Association showed that UK mortgage
approvals for house purchases fell to a three month low in
February.
The number of mortgages approved for house purchases fell to
42,613 in February from 44,142 in January. This was the lowest
since November. The expected level for February was 44,900.
The franc edged up to 112.18 against the yen, from a low of
111.61 hit at 8:00 pm ET. Continuation of the franc's uptrend may
see it challenging resistance around the 114.00 area.
Final data from the Cabinet Office showed that Japan's leading
index rose less than estimated in January.
The leading index climbed marginally to 104.9 in January from
104.8 in December. The score was revised down from 105.5.
On the flip side, the franc held steady at 1.0715 against the
euro, after rebounding from an early low of 1.0720.
Flash survey data from IHS Markit showed that Eurozone private
sector growth reached a near six-year high in March.
The composite output index rose to 56.7 in March from 56.0 in
February. The latest reading was the highest since April 2011.
Economists had forecast the index to fall to 55.8.
Looking ahead, Canada CPI for February, U.S. durable goods
orders for February, Markit's U.S. flash manufacturing PMI for
March and U.S. Baker Hughes rig count data are slated for release
in the New York session.
At 8:00 am ET, Federal Reserve Bank of Chicago President Charles
Evans is expected to speak at the Federal Reserve System Community
Development Research Conference, in Washington DC.
At 9:05 am ET, Federal Reserve Bank of St. Louis President James
Bullard will give a presentation on the U.S. economy and monetary
policy before the Economic Club of Memphis Economic Briefing, in
Memphis, U.S.
At 10:00 am ET, Federal Reserve Bank of New York President and
CEO William Dudley will participate in a fireside chat with
business and economics students at York College, in New York.
At 11:30 am ET, Canadian Finance Minister Bill Morneau will give
a speech in Toronto.
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