Monday during early deals, the Swiss franc tumbled to new multi-day lows against its US and Japanese counterparts. But the franc showed strength against the currencies of Europe and UK. The franc thus jumped to an 18-day high against the euro.
The Swiss franc, which closed last week's trading at 85.54 against the yen declined to 83.43 during early deals on Monday. This set the lowest point for the franc since March 19. If the franc-yen pair falls further, it may find support around the 82.5 level.
The yen gained despite a disappointing economic report from Japan. Industrial output in Japan plummeted by 9.4% in February compared to the previous month, the Ministry of Economy, Trade and Industry said. That was slightly worse than forecasts that called for a decline of 9.0% following the 10.2% decline in January. On an annual basis, industrial output dropped 38.4% compared to forecasts of a 38.1% decline after the 31.0% retreat in the previous month.
As recession fears increased in Japan, analysts expect the Japanese government may map out its third fiscal stimulus package ahead of the G20 summit this week to prop up the economy. Japan has already announced two stimulus packages with combined spending of 12 trillion yen to ease the pain from the global credit crisis.
In early trading on Monday, the Swiss franc weakened to a 12-day low of 1.1512 against the US dollar. The next downside target level for the franc is seen at 1.168. At Friday's close, the dollar-franc pair was quoted at 1.1448.
Against the euro, the Swiss franc climbed to an 18-day high of 1.5131 in early deals on Monday. This may be compared to Friday's close of 1.5218. On the upside, 1.499 is seen as the next target level for the Swiss currency.
Euro zone economic sentiment declined further in March, but more slowly than in the first two months of 2009, a monthly survey carried out by European Commission showed today.
The economic sentiment index declined to 64.6 in March, while the consumer confidence and services confidence in March declined one point each to minus 34 and minus 25, respectively.
While industrial confidence slid 2 points to minus 38, confidence in construction remained at minus 32. The business climate indicator for the Euro area fell to minus 3.58.
During early deals on Monday, the Swiss franc strengthened to 1.6238 against the British pound. The near term resistance level for the Swiss currency is seen at 1.619. The pound-franc pair was worth 1.6397 at last week's close.
The pound tumbled today after a report by the property industry group Hometrack showed that the average price for a home in England and Wales plummeted by a record 10.3 percent on year in March. March's annual fall was the biggest yet in Hometrack's monthly survey of estate agents and surveyors, which started in 2000 and has persistently reported lower price falls than official government data.
Adding to pound's slide, another report showed that Britain's financial services industry is cutting jobs at the fastest rate for 16 years as it cuts costs to soften the blow of a steep fall in profitability. The CBI/PWC financial services survey, covering the three months to early March, found 9 percent of companies reporting a rise in business volumes and 56 percent saying volumes fell, giving a net 47 percent of companies reporting a fall. That marked a sixth successive quarter of declines.
In addition, UK M4 money supply increased 1.4% month-on-month in February, unrevised from the preliminary estimate, after rising 2.4% in January, a final report from the Bank of England showed. On an annual basis, money supply rose 18.7%, revised down from an initial estimate of 18.8% growth. M4 sterling lending increased GBP 21.4 billion, larger than GBP 6.7 billion increase recorded in January.
For comments and feedback: contact email@example.com