fundamental alert

Switzerland Trade Surplus Unexpectedly Widens as Import Demands Falter

Thursday, 20 November 2008 06:47:19 GMT  |  DailyFX Research

The Swiss October trade surplus widened to CHF 1.84 bln from 1.45 bln (revised from 1.44 bln) but only on the back of weaker imports. Exports fell by 2.8% y/y in nominal terms and was down by 2.8% y/y in real terms. Imports fell 5.5% y/y in nominal terms. Overall, Swiss exports held up relatively through the summer, but there are now signs of weaker demand both domestically and globally having an impact. Given the intensification of the credit crisis and general global demand deterioration, export growth is likely to suffer in 2009, pulling overall growth lower.
Swiss Franc traded on a firmer footing after making broad gains following sharp equity market losses. A flight to quality bid has supported the low yielding currency, which has gained across the board, with the exception of USD-CHF. The dollar pairing extended its recent gains to trade up to 1.2145 highs in Asia as the dollar benefited on safe haven demand. Meanwhile, the Swiss Octber surplus widened to CHF 1.84 bln from 1.46 bln. The break down showed exports rising 3.5% m/m, but fell 2.8% y/y in nominal terms and was down 2.8% y/y in real terms. Imports rose 1.5% m/m and fell 5.5% y/y in nominal terms. The Swiss economy has held up relatively well during the financial crisis, but there are signs that weaker demand is now having an impact and exports are likely to suffer ahead, which will have an adverse effect on growth. Currently, EUR-CHF is being influenced by broader euro movement, which has lifted the cross from 1.5131 lows toward the 1.5190 area, while GBP-CHF is moving back in to 1.8100 after finding a base ahead of 1.8050.

Resources

• free demo account
• forex courses
• open an account
• forex stream
• free webinars