The Euro Swiss Franc (EUR CHF) exchange rate held relatively steady this morning following the release of a wealth of positive data for both currencies.
The Euro found initial strength this morning thanks to upbeat Manufacturing PMI figures from across the Eurozone, with the overall reading climbing from 55.4 to 56.2 in March as forecast
The jump was largely attributed to an uptick in both Germany’s and Italy’s factories , with data compiled by IHS Markit showing that manufacturing activity climbed from 56.8 to 58.3 and 55.0 to 55.7 respectively.
Germany’s figures were particularly impressive for EUR investors as Europe’s largest economy reported that its manufacturing PMI struck 71-month high, with the increased activity leading to a rise in job creation last month.
Meanwhile the upswing in Italy’s factories came as a shock to many economists as most had predicted that the sector would in fact weaken in March as the country continues to face economic uncertainty.
However it is not all sunshine and rainbows for the Eurozone’s Manufacturers with Greece’s economic woes continuing to worry observers as activity tumbled from 47.7 to 46.7, leading to its seventh consecutive monthly contraction as the sector again failed to print a reading above 50, thanks to a fall in exports.
Chris Williamson, chief business economist at IHS Markit said;
‘The upturn is broad-based with one exception. Greece is suffering an increased rate of contraction of its manufacturing economy, with exports dropping sharply again in March.’
Looking on the more positive side of things again the EUR CHF exchange rate was also bolstered by the Eurozone’s latest employment figures.
Data shows that the Eurozone Unemployment Rate fell to a fresh eight-year low in February as it slid from 9.6% to 9.5%, likely helped along by Germany’s job market after it reported that unemployment reached a new record low over the same period.
The drop in the jobless rate was also partly thanks to the performance of the manufacturing sector since the start of the year as the sector has seen strong job growth in the first quarter as evidenced by the latest PMI data.
However Greece along with Spain continued to disappoint as the jobless rate remained disappointingly high in both countries, with 23% and 18% unemployment respectively.
Meanwhile the Swiss Franc was also strengthened this morning by its own Manufacturing PMI, along with a reported jump in retail sales.
Strong production and new orders lead to Switzerland’s PMI leaping from 57.8 to 58.6 in March, outpacing expectations of a rise to 58.2 as factory activity expanded at its fastest pace since February 2011.
Sentiment in the Franc was also improved by Switzerland’s retailers as they reported that sales leapt from -1.2% to 0.6% in February, beating expectations that they would still show a 0.8% contraction as strong sales of non-food items and a mild uptick in food, beverages and tobacco sales pushed figures higher.
Looking ahead the EUR CHF exchange rate may advance on Tuesday following the release of the Eurozone’s own retail sales figures with analysts forecasting that monthly sales will bounce back from a slight 0.1% drop at the start of the year to 0.5% growth in February.
Meanwhile the Swiss Franc may cede ground later this week as markets forecast that the domestic inflation rate will have fallen from 0.6% to 0.5% last month.
Current Interbank Exchange Rates
At the time of writing the EUR CHF exchange rate was trending around 1.06 and the CHF EUR exchange rate was trending around 0.93.