KOF Swiss Indicator Signals 7th Straight Month of Improved Economy
THE TAKEAWAY: KOF Swiss Leading Indicator rises to 1.57, beats expectations -> Swiss economy continues to avoid pressures from the neighboring debt crisis -> The Swiss Franc is trading slightly lower
The rate of growth of the Swiss economy is even faster than expected according to the KOF leading indicator, which rose for a seventh straight month in August, reaching the highest level in a year. The leading indicator was reported at 1.57, beating analysts’ expectations for 1.45 and higher than July’s revised 1.41 leading indicator.
The KOF Swiss Economic Institute reported that a measurement of Swiss industry, consumption and export destination EU, which make up 90% of the Swiss GDP, displayed positive developments.
The Swiss economy has performed well in 2012, avoiding pressures from the Euro debt crisis, and has therefore become an ideal safe haven for investors. That is why Swiss 5-year bond yields turned negative at the end of May, and the 10-year benchmark bond yield continues to decline in the same direction.
Although indications of higher GDP are usually currency positive, the Swiss Franc lost slightly against the US Dollar following the release. USDCHF rose towards 0.9575, likely following a simultaneous decline in the Euro against the US Dollar. The pair has traded in a tight 20 point range over the past 24-hours of low volatility trading.
USDCHF 15-minute: August 29, 2012
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