ZURICH: The Swiss franc traded near flat against the euro on Monday, sticking close to a target set by the Swiss National Bank nearly one month ago, showing markets were still not willing to test the central bank's resolve to defend its recently imposed level.
The SNB took the drastic measure of setting a ceiling of 1.20 francs per euro at the start of September as part of its battle to stem the franc's rise after it hit a number of record highs against both the euro and the dollar this year.
At 0629 GMT, the franc was largely unchanged against the euro compared to Friday's New York close, trading at 1.2136 per euro. Against the dollar, the franc was also near flat at 0.9109 per dollar.
The SNB has won political backing for its move to cap the strong franc and Swiss finance minister Eveline Widmer-Schlumpf told Reuters over the weekend that the central bank's decision had restored calm and helped to strengthen export markets.
Economic uncertainty in the euro zone prompted investors to pile into the franc, seen as a safe-haven asset, pushing the currency to a series of fresh highs and creating headaches for Switzerland's key export industry.
Switzerland's relatively stable economy has made it an attractive place to park money and traders will eye Swiss economic data due later on Monday and this week for more insight into just how healthy the Alpine nation's economy is.
There are signs Switzerland is starting to feel the impact of the broader economic slowdown. The KOF economic barometer, a leading growth indicator, hit a two-year low in September, data showed last week.
"Like other Swiss leading indicators such as the PMI and the Credit Suisse ZEW Index, the KOF barometer points to a visible economic cooling of the economy," analysts at Credit Suisse said.
"Against the backdrop of the still strong currency and the weaker global growth picture, we expect only marginally positive economic growth for the remainder of the year," the analysts said.
Comments
Comments are closed for this article.