ZURICH: The Swiss franc inched lower against the euro on Friday and was unchanged against the dollar, with the greenback being supported by hopes for an upbeat US nonfarm payrolls report later in the session.
Investors expect the US data to show a solid increase in July, which could make it more likely the Federal Reserve will start scaling back its monetary stimulus later this year.
Closer to home, Switzerland's purchasing managers' index (PMI), due at 0730 GMT, is expected to show a pickup in Swiss manufacturing activity in July. Analysts polled by Reuters are looking for a reading of 52.5 points, up from 51.9 points in June.
Switzerland's economy is in relatively solid shape, underpinning safe-haven demand for the country's currency that the Swiss National Bank capped at 1.20 per euro almost two years ago to fend off deflation and recession.
"If the economic upswing continues in the second half of the year ... the SNB will adopt a tighter monetary policy when the euro-Swiss franc exchange rate reaches 1.30, and gradually scale back its currency reserves," J.Safra Sarasin forex strategist Ursina Kubli said in a note.
If the upswing turned out to be even stronger, with a Swiss PMI above 60 points by the end of the year, the SNB could already start selling the currency reserves it piled up to keep a lid on the franc when the exchange rate reaches 1.27 francs per euro, Kubli said.
The franc was unchanged at 0.9372 per dollar at 0545 GMT, compared to the New York close.
The franc fell 0.1 percent against the euro to trade at 1.238 per euro.
Comments
Comments are closed for this article.