Swiss Franc Falls Amid Risk Appetite
October 25 2016 - 3:29AM
RTTF2
The Swiss franc drifted lower against its major counterparts in
European trading on Tuesday amid risk appetite, with higher metal
prices, encouraging reading on German business sentiment and strong
earnings updates from Randstad and Orange supporting underlying
sentiment.
Survey data from Ifo institute showed that German business
sentiment rose to the highest level in more than two years in
October. The Ifo business confidence index rose to 110.5 from 109.5
in the prior month. The expected reading was 109.
Oil prices climbed after Russian Energy Minister Alexander Novak
emphasized that there is an urgent need to rebalance the oil
market.
Investors focus on speeches from Atlanta Fed President Dennis
Lockhart, Bank of England Governor Mark Carney and European Central
Bank President Mario Draghi for further clues as to the future
direction of monetary policy.
Speaking about monetary policy at the University of Basel on
Monday, the Swiss National Bank President Thomas Jordan said that
the negative interest rate policy is fundamentally effective, given
the overvaluation of the franc and the globally low level of
interest rates.
The central bank has manoeuvre to take rate into further
negative territory, if found necessary, he added.
The franc showed mixed performance in the Asian session. While
the franc rose against the yen, it held steady against the
greenback, pound and the euro.
The franc weakened to a 7-1/2-month low of 0.9997 against the
greenback, from Monday's closing value of 0.9934. Continuation of
the franc's downtrend may lead it to a support around the 1.02
zone.
The Swiss franc slipped to 1.2215 against the pound, its weakest
since October 7. The Swiss franc is seen finding support around the
1.28 region.
The franc declined to a 5-day low of 1.0864 against the euro,
off its Asian session's high of 1.0805. The franc is poised to test
support near the 1.10 area.
Pulling away from its recent 5-day high of 105.17 against the
Japanese yen, the franc dropped to 104.59. Further weakness may
take the franc to a support around the 103.00 mark.
Looking ahead, U.S. FHFA house price index for August, U.S.
S&P Case-Shiller house price index for August and U.S. consumer
confidence index for October are slated for release in the New York
session.
At 10:35 am ET, Bank of England Governor Mark Carney is
scheduled to testify about the economic consequences of the Brexit
Vote before the House of Lords Economic Affairs Committee, in
London.
At 11:30 am ET, European Central Bank President Mario Draghi is
expected to speak about stability, equity, and monetary policy at
the German Institute for Economic Research, in Berlin.
At 1:20 pm ET, Atlanta Fed President Dennis Lockhart is expected
to speak to the Opportunity Finance Network about "Lending and
Investing in Community Development" in Atlanta.
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