Swiss Franc Slips Modestly On Heavy GDP Miss

Talking Points

• The Swiss Franc was lower against the Euro after a heavy miss for Swiss GDP
• Growth came in below expectations both compared with the previous quarter and when annualized
• The Swiss statistics agency said the trade balance and weaker investment were to blame

The Swiss Franc slipped a little against the Euro on Thursday after Swiss growth figures missed forecasts.

Official Gross Domestic Product data for the final three months of 2016 showed an on-quarter growth rate of just 0.1%. This was well below the 0.4% which markets had been looking for, and the same rate as seen in revised figures for the previous quarter.

On-year growth was just 0.6%, less than half the 1.3% gain which markets had been expecting. The Swiss statistics agency said that while private and government consumption had both had positive effects on the fourth quarter’s figures, investment in construction and equipment fell slightly. It also said that the trade balance had curbed GDP growth- presumably thanks to the perils of a relatively high currency.

Goods exports declined by 3.8%, the data showed, with Swiss staples such as precision tools, watches and jewelry all suffering.

For 2016 as whole, real GDP was up 1.3%, better than 2015’s 0.8% gain.

The Euro climbed against the Fran in the aftermath of the data, with EUR/CHF up to 1.06461, from 1.06410 just before the release.

Modest Gains: EUR/CHF

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--- Written by David Cottle, DailyFX Research

Contact and follow David on Twitter: @DavidCottleFX