THE TAKEAWAY: ZEW-Credit Suisse investor confidence survey reported at -43.4 -> Current economic situation shown as improved -> CHF remains supported
Swiss investor confidence significantly dropped in June, as the ZEW-Credit Suisse indicator dropped 39.4 points to -43.4 from the previous month. The confidence survey is at the lowest level since January and shows the second straight month of negative confidence. However, the current economic situation survey improved from 10.0 to 19.7 in June, reaching its highest level since August 2011.
The survey indicates a likely economic slowdown in Switzerland in the second half of the year. The survey is based on surveys with financial market experts about economic developments on a six-month horizon.
Today’s release stays in line with previous indicators that show a future economic slowdown despite a recently strong Swiss economy, most likely due to pressures from the Eurozone crisis. Earlier this month, the Swiss purchasing manager’s index for manufacturing was reported at its lowest level since 2009, despite a 0.7% expansion in GDP in Q1.
USD/CHF remained relatively unchanged following the survey release. Risk correlated currencies have found support against the US Dollar in today’s trading ahead of the Fed’s policy decision expected later today.