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Swiss Franc Unfazed by Weak CPI with Risk Trends, NFP in Focus

Swiss Franc Unfazed by Weak CPI with Risk Trends, NFP in Focus

Oded Shimoni, Junior Currency Analyst


Talking Points:

  • Switzerland’s CPI -0.4% in December, below expectations
  • Year-on-year CPI in negative territory at -1.3%
  • Swiss Franc little changed versus other major currencies

See how retail traders are positioning in the majors in your charts using the FXCM SSI snapshot.

The Swiss Franc was little changed versus other major currencies (at the time this report was written) after the Consumer Price Index (CPI) fell below expectations.According to Swiss Federal Statistical Office, Switzerland’s CPI fell by -0.4 percent in December compared with the previous month, which also saw a decline of -0.1 percent. The figure came below expectations of a -0.3 percent drop. The year-on-year inflation rate was down to -1.3 percent compared with the annualized -1.4 percent in November, but below expectations of a -1.2 percent rate.

The SNB opted to keeps interest rates unchanged at -0.75 percent on December 10, after the ECB’s stimulus efforts appeared to be below market expectations in their last policy announcement, resulting in a stronger Euro. The appreciations in the Euro reduced speculation that the SNB might have to keep the Franc devalued by intervening in the FX market and/or cutting the deposit rate further down in negative territory. It remains to be seen how the latest discouraging CPI figures will influence the SNB’s monetary policy actions, but today’s focus was seemingly elsewhere; Sentiment trends continued to drive currency market today, as the market appeared to be in a “risk on” mode in Asia and early European trading with risk-geared Australian, Canadian and New Zealand Dollars outperforming the safety linked Swiss Franc and Yen. With the US Nonfarm Payrollsat 13:30 GMT, the market seemed to focus on further developments in risk trends later today, and the Swiss Franc was little changed versus other major currencies.

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.