The Swiss franc lost some ground to the euro and the dollar early on Wednesday but was still seen rising against both currencies thanks to strong economic fundamentals despite a central bank intervention threat. The franc was seen extending the previous session's gains against the dollar, when it breached parity with the greenback, although still short of the 19-month high touched on November 26.
UBS Economist Reto Huenerwadel said he believed surprisingly strong Swiss macro-economic fundamentals were driving the franc more than comments by the Swiss National Bank this week that it would step in to prevent the franc's appreciation.
"Downside focus remains on euro/Swiss 1.5040 ahead of 1.5012/08 support range," UBS said in a note. The Swiss economy pulled out of recession in the third quarter thanks in part to robust private consumption, while a jump in PMI data to a 20-month high confirmed the economy is recovering faster than expected, data showed on Tuesday.
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