BLBG:Switzerland’s Franc Extends Its Gains Against the Dollar and the Euro
Switzerland’s franc strengthened against all 16 of its major peers tracked by Bloomberg as a measure of German business confidence sank and U.S. stock futures dropped, boosting demand for haven assets.
The franc rose the most against the New Zealand dollar as investors weighed whether the Federal Reserve will further bolster the economy when Chairman Ben S. Bernanke speaks this week. Germany’s Ifo institute said its business climate index, based on a survey of 7,000 executives, dropped to 108.7 in August, the lowest since June 2010. The franc also gained as the Swiss National Bank refrained from imposing new measures to curb its advance and Standard & Poor’s 500 Index futures fell.
“The market is still pretty much risk averse, and there’s underlying demand for safe assets like the franc,” said Chris Walker, a currency strategist at UBS AG in London. “In the past three weeks, the SNB announced franc-curbing measures every Wednesday, but there was no announcement so far today.”
Switzerland’s currency appreciated 0.3 percent to 1.1411 francs per euro as of 11:45 a.m. in London. It rose to 0.4 percent to 78.94 centimes per dollar. One franc bought 96.94 yen, versus 96.76 yen yesterday.
A U.S. report today may show business-equipment demand declined. Bernanke and other central bankers meet this week in Jackson Hole, Wyoming, amid signs of a slowing U.S. recovery.
Swiss 10-year bond yields were little changed after falling to 0.85 percent last week, the lowest since Bloomberg began collecting the data in 1994. The 10-year yield was at 0.97 percent, while that on the two-year note fell two basis points to minus 0.04 percent. A negative yield indicates investors are willing to sacrifice capital for safety.
Swiss government bonds have handed investors a 2.9 percent return so far this month, beating a 2.7 percent gain from German bonds, according to indexes compiled by the European Federation of Financial Analysts Societies and Bloomberg.
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
