A positive week for both the euro and the Swiss franc on a combination of net positive economic updates for the euro area and on a rise in global risk aversion sentiment to help the low-yielders out perform the risk assets on net overall.
The Euro
Headlines and Economic data
Monday:
- Subdued growth of euro area continues in April – IHS Markit Composite PMI
- Sentix Investor confidence improves to 5.3 vs. -0.3 previous
- Volume of retail trade unchanged in euro area; Up by 0.3% in EU28
Tuesday:
- German Factory Orders Rebound Less Than Forecast After Slump
- Spring 2019 Economic Forecast: Growth continues at a more moderate pace
Wednesday:
- German industrial production beats forecasts
- ECB’s Draghi sees wage pressure, won’t allow defeat on inflation
Thursday:
- The euro saw gains on the session, likely due to a weakening U.S. dollar. No apparent catalyst or explanation for the pressure on the Greenback, especially given the net positive U.S. economic updates including a moderate rise in producer prices and a better-than-expected U.S. trade balance update.
Friday:
The Swiss Franc
Switzerland Headlines and Economic data
The latest update on Swiss foreign currency reserves (CHF 772B vs. CHF 756B previous) and the unemployment rate (2.4% vs. 2.5% previous) were the only potential catalysts from Switzerland, and arguably, they had little effect on franc pairs as expected. As usual, it was once again all about the euro and risk sentiment as the usual driver for Swiss franc price action, and given the combination of global fears rising due to the Trump tariff threats and the failure of the U.S.-China to come to a trade deal this week, we saw the lower-yielding currencies out perform this week. The Swiss franc was a big net winner on safe haven flows, only falling to the Japanese yen, which arguably tends to outperform when negative global risk sentiment tends to be the main driver in financial markets.