Swiss Franc Falls On Trade Optimism
October 28 2019 - 6:01AM
RTTF2
The Swiss franc declined against its major counterparts in the
European session on Monday, as hopes of the U.S. and China
finalizing "phase one" trade deal underpinned risk sentiment.
The Office of the U.S. Trade Representative said in a statement
that the countries have "made headway on specific issues and the
two sides are close to finalizing some sections of the
agreement."
On Saturday, China's Commerce Ministry said both sides are
"close to finalizing" some parts of a trade agreement after
high-level telephone discussions on Friday.
U.S. President Donald Trump said he hopes to sign the deal with
China's President Xi Jinping next month at a summit in Chile.
On the Brexit front, the European Union has agreed for a Brexit
extension until January 31, 2020, removing the risk of a damaging
no-deal split on Thursday.
The currency showed mixed trading against its major counterparts
in the previous session. While it was steady against the pound and
the yen, it dropped against the greenback and the euro.
The franc dropped to near a 2-week low of 109.14 against the
yen, from a high of 109.38 hit at 5:00 pm ET. The franc is seen
finding support around the 108.00 region.
Data from the Bank of Japan showed that Japan producer prices
rose 0.5 percent on year in September - in line with expectations
and unchanged from the August reading following a downward revision
from 0.6 percent.
On a monthly basis, producer prices were flat following the 0.1
percent decline in the previous month.
The Swiss currency depreciated to 0.9970 against the greenback,
its weakest since October 16. The next likely support for the franc
is seen around the 1.01 level.
The franc that ended Friday's trading at 1.1017 against the euro
fell to near a 2-week low of 1.1057. On the downside, 1.13 is
possibly seen as the next support level for the franc.
Data from Destatis showed that German import prices decreased at
a slower than expected pace in September.
Import prices dropped 2.5 percent year-on-year in September,
following a 2.7 percent fall in August. This was slower than the 3
percent decline economists had expected.
After rising to 1.2739 against the pound at 5:00 pm ET, the
franc eased off to a 4-day low of 1.2809. The franc is poised to
challenge support around the 1.31 level. The latest Distributive
Trends Survey from the Confederation of British Industry showed
that the UK retail sales volume declined for the sixth consecutive
month in October and retailers' stock levels in relation to
expected sales reached a record high.
The retail sales balance fell to -10 percent in October.
Retailers expect sales volume to rise marginally next month with a
balance of 1 percent forecasting sales growth.
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