During early New York deals on Friday, the Swiss franc spiked up against major opponents as Asian and European stocks gained.
The Swiss central bank on Thursday left the target range for the three-month Libor unchanged at 0%-0.75% and intends to keep the Libor within the lower part of the target range at around 0.25%.
The SNB downgraded its inflation forecast for this year to 0.7% from 0.9%. For 2011, average inflation is seen at 0.3%, sharply down from the previous estimate of 1%. Then it is projected to rise to 1.2% in 2012 compared with the June estimate of 2.2%. The reason behind the revision was the appreciation of the Swiss franc and the declining momentum in the global economy, the bank said.
The franc traded higher against the euro and the British pound in in early New York deals from previous session’s multi-week lows of 1.3393 and 1.6010, respectively. Currently, the franc is worth 1.5810 against the sterling and 1.3202 versus the euro.
In economic news, Germany’s Statistical office Destatis said the producer price index rose by 3.2% from a year ago, slower than the 3.7% increase in July. Economists had expected inflation to slow to 3.5%. Compared with the preceding month, producer prices were unchanged in August, again missing expectations for a 0.3% rise.
Meanwhile, the European Central Bank report showed that the euro area current account deficit on a seasonally adjusted basis in July was EUR 3.8 billion. The shortfall for June was revised to EUR 3.8 billion from EUR 4.6 billion.
On an unadjusted basis, the current account balance showed a surplus of EUR 3.7 billion, larger than the EUR 1.8 billion surplus seen in June.
The franc that touched a 4-day low of 1.0185 versus the US dollar at about 4:15 am ET, edged up thereafter. At present, the franc is trading near 1.0109 versus the dollar, which may be compared to Thursday’s close of 1.0160.
According to a report released by the U.S. Labor Department today, consumer prices increased by slightly more than expected in the month of August. The report showed that the consumer price index rose by 0.3 percent in August, matching the increase that was seen in July. Economists had been expecting consumer prices to show a slightly more modest increase of about 0.2 percent.
Core consumer prices, which exclude food and energy prices, came in unchanged in August after edging up by 0.1 percent in July. The core index had been expected to inch up by 0.1 percent.
Against its Japanese counterpart, the Swiss currency also surged up in today’s North American deals and presently trading at 84.90. At yesterday’s close, the franc-ye pair was quoted at 84.48.
At 9:55 am ET, a preliminary report of the Reuters/University of Michigan’s consumer sentiment survey for September is due.