Swiss Franc Extends Rise Amid Risk Aversion, Strong GDP Data
28 August 2015 - 6:32PM
RTTF2
The Swiss franc extended its early rally against its major
rivals in European deals on Friday, as the Swiss economy recovered
unexpectedly in the second quarter, while the European shares
declined amid doubts over an interest rate hike by the Federal
Reserve at the September meeting.
While the revised U.S. GDP figures helped ease global growth
worries, signs that economic conditions are getting better put the
possibility of a September rate hike back on the table.
Investors are waiting for further clues on the interest rate
outlook as Federal Reserve officials continue their annual meeting
in Jackson Hole, Wyoming.
Data from the State Secretariat for Economic Affairs showed that
gross domestic product grew 0.2 percent sequentially in the second
quarter, offsetting a 0.2 percent fall in the prior quarter.
Economists had forecast a 0.1 percent fall.
On a yearly basis, the economy expanded 1.2 percent, the same
rate of growth as seen in the prior quarter. The rate was forecast
to slow to 0.9 percent.
The franc has been trading higher against its major
counterparts, except the pound, in the previous session.
In European deals, the franc was trading at 0.9585 against the
greenback and 126.01 against the yen, off early lows of 0.9669 and
125.18, respectively. The franc ended yesterday's trading at 0.9660
against the greenback and 125.19 versus the yen. If the franc
extends rise, it is likely to find resistance around 0.95 against
the greenback and 127 against the yen.
The franc reversed from early 3-day lows of 1.0871 against the
euro and 1.4906 against the pound, and rose to 1.0801 and 1.4732,
respectively. At yesterday's close, the franc was quoted at 1.0862
against the euro and 1.4875 against the pound. The next possible
resistance for the franc may be located around 1.05 against the
euro and 1.47 against the pound.
Looking ahead, the U.S. personal income and spending data for
July and University of Michigan's final consumer sentiment index
for August, as well as Canada industrial product price index for
July are set to be released in the New York session.
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