The Swiss franc declined to its lowest level since August against the euro as Chinese economic reports showing manufacturing growth and stock gains reduced demand for currencies investors see as a refuge. The Swiss currency also weakened against all 16 of its most-active counterparts after China’s Purchasing Managers’ Index rose to 54.7 in October from 53.8 a month earlier, official data today showed. The MSCI Asia Pacific Index of shares rose as much as 0.5 percent. The currency stayed lower after data revealed the country’s manufacturing industries grew at the weakest pace in eight months in October. “The Swiss franc is being driven by the global environment rather than domestic factors,” said Ian Stannard, a senior currency strategist at BNP Paribas SA in London. “There will be a lot going on this week, including key policy meetings by the Federal Reserve and the ECB. The franc has come a long way, and some traders may be unwinding some bullish positions ahead of these events.” The franc declined 0.7 percent against the euro to 1.3792 as of 11:09 a.m. in London, after weakening to 1.3797 earlier, the lowest since Aug. 11. It depreciated to 98.79 centimes per dollar compared with 98.24 last week. One franc bought 81.41 yen from 81.84 yen on Oct. 29. Speculation the Federal Reserve and the Bank of Japan will this week announce further measures to keep borrowing costs low to spur growth also weakened the Swiss currency. The European Central Bank will also set interest rates on Nov. 4. Rate Outlook The franc has gained 4.1 percent against its major trading peers in the past six months, making it the best-performing currency for the period after the yen, according to Bloomberg Correlation-Weighted Currency Indexes. The Swiss National Bank has kept its benchmark interest rate at 0.25 percent for the past 19 months. Swiss central bank President Philipp Hildebrand said last week there are signs the bank’s record low rates could fuel a property bubble, suggesting he’s growing uncomfortable with the current policy. The yield on 10-year Swiss bonds was little changed at 1.49 percent today. Swiss government securities returned 4.5 percent this year, lagging behind German bonds, which handed investors 7.9 percent during the same period, according to Bloomberg and European Federation of Financial Analysts Societies data. To contact the reporters on this story: Anchalee Worrachate in London at aworrachate@bloomberg.net To contact the editor responsible for this story: Daniel Tilles at dtilles@bloomberg.net.

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