The Swiss franc lost ground against its major counterparts in early European trading on Friday following a couple of discouraging economic reports from the region.
The franc thus tumbled to a 1-1/2 month low against the euro, 10-day low versus the yen and reversed its previous session’s uptrend against the rest of majors.
Swiss retail turnover slipped by a real 2.6% on a monthly comparison in August, the Federal Statistical Office said today. This reversed a 1% rise seen in July.
Annually, retail sales grew 0.5% in August. This was much slower than the 4.7% growth seen in the prior month. While sales of food, beverages and tobacco dropped 1.5%, non-food sales rose 2.9%.
At the same time, Switzerland’s SVME Purchasing Managers’ Index dropped for a second month in September, a joint report by the SVME Association of Purchasing and Materials Management and Credit Suisse showed today. The indicator fell by 1.7 points to 59.7 in September. It lost 7.2 points since its all time high in June.
The franc plunged to 1.3429 against the euro by 3:30 am ET, the lowest level since August 18. On the downside, the domestic unit may find support around the 1.3460 level. The euro-franc pair that finished yesterday’s deals at 1.3398 is presently quoted at 1.3428.
German retail sales dropped a seasonally and calendar adjusted 0.2% in real terms in August from the preceding month, following a 0.4% fall in July, the Federal Statistical Office said in a report today. Economists had expected an increase of 0.4%.
Year-on-year, retail turnover recorded a real growth of 2.2% in August, faster than the 1.2% increase in the previous month. Economists were looking for an increase of 3.4%.
Against the yen, the franc slumped to a 10-day low of 84.89 at this time and this may be compared to Thursday’s close of 85.05. The franc-yen pair is presently worth 84.96 with 84.35 seen as the next likely support level.
Nationwide core consumer prices in Japan were down 1.0 percent on year in August, the Ministry of Internal Affairs and Communications said today – matching expectations following the 1.1 percent decline in July.
Overall nationwide inflation was unchanged at -0.9 percent on year, again in line with forecasts.
Meanwhile, the unemployment rate in Japan came in at a seasonally adjusted 5.1 percent in August, the Ministry of Internal Affairs and Communications said today. That was in line with expectations, easing from 5.2 percent in July.
The Swiss franc also declined to as low as 0.9826 against the US dollar and 1.5495 against the pound before leveling off around 3:50 am ET. The Swiss currency that closed yesterday’s deals at 1.5445 against the pound and 0.9827 versus the greenback is presently quoted at 1.5486 and 0.9824, respectively.
Looking ahead, PMI data from major eurozone economies for September are expected in the upcoming trading hours.
Across the Atlantic, US personal income and spending, construction spending-both for August and ISM manufacturing and the University of Michigan’s consumer confidence data-both for September have been slated for release in the North American session.