Euro to Swiss Franc (EUR/CHF) Exchange Rate Edges Higher
The Euro to Swiss Franc (EUR/CHF) exchange rate advanced to 1.0488 on Monday following the publication of surprisingly upbeat German trade data.
A sturdy surge in exports at the close of last year saw Germany post a record current-account surplus of 215.3 billion Euros in 2014.
The report saw economist Carsten Brzeski comment; ‘This is not a conscious beggar-thy-neighbour policy. Germany has the right product mix at the right time, and on top of that it is helped by the lower Euro.’
Today’s Sentix Investor Confidence index for the Eurozone also showed that sentiment surged to 12.4 in February from 0.9 in January.
The result was considerably stronger than the increase to 3.0% expected and lent the Euro support.
The Euro to Swiss Franc (EUR/CHF) exchange rate has smashed through the SNB’s suspected exchange rate ‘corridor’ and could fall further.
EUR/CHF Exchange Rate Drops to 1.0460
Although the Euro to Swiss Franc (EUR/CHF) exchange rate has recovered from the lows struck in the immediate aftermath of the Swiss National Bank’s (SNB) decision to ditch its cap with the common currency, the pairing remains bearish.
Part of the reason for the SNB’s removal of the original cap was that the recent decline in the Euro was putting it under intense pressure. However, demand for the common currency has only slid further since then.
At the beginning of the week it was reported that the SNB is pursuing an unofficial exchange rate corridor of between 1.05 and 1.10 and has been intervening in the currency market in order to achieve it.
However, the Euro has tumbled through this level, with the EUR/CHF exchange rate closing out Friday’s European session trading in the region of 1.0460.
Demand for the Euro has been seriously undermined by the recent negotiations between Greece and its creditors as it appears neither side is prepared to compromise on the issue of Greek debt.
While Syriza, an anti-austerity party and winner of the recent general election, is no longer pushing for the wiping out of Greece’s debt obligations, it is determined to renegotiate the terms of the nation’s bailout.
If it seems that the ECB is going to stand firm and not allow Greece any leeway, the nation could move closer to exiting the currency bloc.
‘Grexit’ speculation may drive the Euro lower and see the EUR/CHF currency pair fall further still over the next five days.
Euro to Swiss Franc (EUR/CHF) Exchange Rate Forecast
Swiss data to be aware of next week includes the nation’s unemployment figures for January, the Swiss consumer price index and the Producer & Import Price report.
The level of joblessness in Switzerland came in at a non-seasonally adjusted 3.4% in December.
It has been forecast that unemployment edged down to 3.3%.
Inflation, meanwhile, is expected to have increased from -0.5% month-on-month to -0.15%.
Of course, data from the Eurozone and the ongoing Greek debt discussions will also be driving EUR/CHF movement.
Given that the deadline for concluding the negotiations is approaching, the talks are likely to step up a gear in the week’s ahead.
Negative developments would weigh heavily on the Euro and if the Franc appreciates much more against its European counterpart, the Swiss National Bank (SNB) may have to reconsider its approach to reigning in the currency.
The Euro to Pound Sterling (EUR/GBP) exchange rate closed out the week trading in the region of 0.7432
The Pound Sterling to Euro (GBP/EUR) exchange rate was trading in the region of 1.3451
The Euro to Swiss Franc (EUR/CHF) exchange rate was trading in the region of 1.0479
The Swiss Franc to Euro (CHF/EUR) exchange rate was trading in the region of 0.9532