The Swiss franc extended its Asian session's downtrend against the US dollar and the Japanese yen and hit new multi-day lows during early European deals on Tuesday. Meanwhile, the franc pared its Asian session's 6-day high against the European currency and a 5-day high versus the British pound.
Against the US dollar, the Swiss franc traded down during early deals on Tuesday. At 6:05 am ET, the franc declined to a 5-day low of 1.1476 against the dollar, compared to 1.1364 hit late New York Monday. The next downside target level for the Swiss currency is seen around 1.168.
The Swiss franc that closed Monday's North American session at 1.5246 versus the European currency reached a 6-day high of 1.5163 during Tuesday's early Asian deals. Thereafter, the franc reversed its direction and is currently quoted at 1.5201 against the euro with 1.545 seen as the next target level.
A final report from the Eurostat showed that gross domestic product, or GDP, contracted 1.6% quarter-on-quarter in the final three months of 2008. The pace of decline was slightly up from the previously estimated fall of 1.5%. GDP fell 0.3% each in the third and second quarters. The statistical office also revised fourth quarter annual GDP decline to 1.5% from an initial 1.3% fall.
Against the British pound, the Swiss currency lost ground after hitting a 5-day high of 1.6660 during today's early Asian deals. At 6:40 am ET, the franc slipped to 1.6786 against the pound, compared to Monday's closing value of 1.6787. The next downside target level for the Swiss franc is seen around 1.704.
UK. Industrial production in UK declined 1% month-on-month in February, the Office for National Statistics or ONS said. Economists had expected output to fall 1.2% in February, following a 2.7% decrease in January. Year-on-year, production was down 12.5% in February, in line with economists' expectations.
Meanwhile, manufacturing production in February dropped 0.9% from the previous month, taking the annual decline to 13.8%. Economists were looking for a monthly fall of 1.5% and an annual 14.2% drop in February.
The UK recession is still very serious and is likely to continue for sometime, a quarterly Economic Survey from the British Chambers of Commerce showed. The business lobby said there is a clear need for corrective action.
According to the survey, the manufacturing sector's balances deteriorated again in the first quarter and reached record lows in almost all critical areas. The balances for the service sector showed improvement in most key areas, though they still remain in negative territory.
The Swiss franc extended its Asian session's loss against the Japanese yen during early European deals on Tuesday. The yen that closed Monday's New York deals at 88.92 against the franc touched a 5-day low of 87.18 at 6:15 am ET. If the Swiss currency weakens further, 85.9 is seen as the next target level.
Today, the Bank of Japan retained its key interest rate, but it decided to expand the range of eligible collateral in order to make funds easily available.
The Policy Board of the central bank unanimously voted to hold the uncollateralized overnight call rate at 0.1%. The decision came in line with economists' expectations. The previous change in interest rates was a 20 basis point cut implemented in December 2008.
The central bank said it will accept loans on deeds to municipal governments as eligible collateral and also broadened the range of eligible collateral for loans on deeds to the government and those with government guarantees.
Traders now turn toward the New York session, in which the U.S. Federal Reserve is expected to release its monthly consumer credit report at 3 pm ET. Consumer credit for February is likely to show a decline of $1.5 billion.
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