RTTN:Swiss Franc Rebounds Against Dollar And Yen After Swiss Manufacturing Report
(RTTNews) - The franc recovered some of its Asian session losses against the currencies of the U.S. and Japan in early European deals Thursday after a report showed that conditions across Swiss manufacturing sector improved in February.
The Swiss SVME purchasing managers' association and Credit Suisse said that its seasonally adjusted purchasing managers' index rose to 49 in February from 47.3 in January.
Although a PMI reading below 50 indicates contraction in the sector, the index exceeded economists' forecasts, who called for an increase of 48.5.
At the same time, the Swiss economy expanded unexpectedly in the fourth quarter, rising 0.1 percent quarter-on-quarter against economists' expectations for a 0.1 percent contraction.
Annually, GDP rose 1.3 percent, faster than the expected 1.1 percent growth.
Investors are now awaiting European Union leaders and finance ministers meeting in Brussels later in the day, which aims to finalize the second bailout package for Greece.
The initial euphoria over the ECB's refinancing operation faded yesterday after a less dovish testimony from the US Federal Reserve Chairman Ben Bernanke, who gave no signals of another round of economic stimulus.
The Swiss franc appreciated almost 0.6 percent to 89.91 against the yen around 4:30 am ET from Asian session's 2-day low of 89.39. The alpine unit thus rebounded against the yen, after having tested its 200-day SMA at 89.31.
Japan's capital spending jumped 7.6 percent on year in the fourth quarter of 2011. That confounded economists' forecasts for a contraction of 6.5 percent following the 9.8 percent plunge in the third quarter.
Against the dollar, the franc advanced from Asian session's 1-week low of 0.9060 to reach as high as 0.9030 before holding steady around 5:00 am ET. On the upside, the Switzerland currency may target resistance around the 0.8950 level.
Although the Swiss franc strengthened against the pound after the manufacturing report, it failed to sustain gains and retraced to a fresh weekly low of 1.4424 around 5:35 am ET from a high of 1.4388. The next downside target for the franc is seen around the 1.4470 level.
The Swiss franc was range-bound against the euro, moving between 1.2061 and 1.2051 so far today. The pair never dropped below the 1.2025 level since September 6, 2011, when the Swiss National had decided to peg CHF at 1.2 euros.
Eurozone inflation rose to 2.7 percent in February from 2.6 percent in January, flash estimate from Eurostat showed today. Economists were expecting the rate to stay unchanged at 2.6 percent. Inflation continues to remain above the central bank's 'below, but close to 2 percent' target.
(RTTNews) - At the same time, the Eurozone unemployment rate rose to a seasonally adjusted 10.7 percent in January from 10.6 percent in December. The rate reached a new record high in January. Economists were forecasting the rate to drop to 10.4 percent in January.
Looking ahead, the U.S. personal income and spending data for January, weekly jobless claims for the week ended February 24, ISM manufacturing index for February and construction spending for January are slated for release in the New York morning session.
