BLBG:Franc Falls Against Euro as Stock Gains, Data Damp Haven Bids
Switzerland’s franc weakened against the euro and the Australian dollar as stocks advanced and data showed France’s service activity improved, damping demand for safer assets.
The franc fell the most against the Swedish krona as Asian shares snapped three days of losses on speculation the Federal Reserve will take steps to bolster the U.S. recovery. It strengthened against the dollar and the yen. The service activity for France rose to 56.1 from 54.2 in July, according to Markit Economics. A separate survey showed China’s manufacturing may have contracted at a slower pace in August.
“There is some clawback in pessimism and that helps to contain demand for the franc,” said Geoffrey Yu, a currency strategist at UBS AG in London. “People are also cautious about further possible measures by the Swiss National Bank.”
Switzerland’s currency weakened 0.5 percent against the euro to 1.1399 francs as of 10:20 a.m. in London and fell 0.9 percent against the krona to 7.991. It rose to 78.76 centimes per dollar from 79.02 centimes yesterday.
The currency has strengthened 13 percent this year, the best performer among a basket of foreign exchange from 10 developed markets according to Bloomberg Correlation-Weighted Currency Indexes.
The franc’s strength, which is making Swiss products more expensive abroad, prompted the central bank to assess “the whole range of options” to prevent its gain after it rose to a record against the euro this month.
A preliminary reading of 49.8 for a manufacturing index in China released by HSBC Holdings Plc and Markit Economics today compares with a final reading of 49.3 for July. The final August number is due Sept. 1. A reading below 50 indicates a contraction.
To contact the reporter 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
