A very mixed week for both the Euro and the Swiss franc, but both currencies sank near the end after another round of disappointing business sentiment data from Europe.
European Headlines and Economic data
- Bundesbank sees German economy stagnating in fourth quarter
- ECB has not reached limits of monetary policy: Lane
- Low ECB rates will further weigh on bank profits: de Guindos
- In September 2019 the current account of the euro area recorded a surplus of €28B, compared with a surplus of €29B in August 2019
- Excessive risk-taking and falling bank profitability cloud euro zone’s growth, ECB says
- Euro area financial stability environment remains challenging
- Euro zone experiencing protracted weak growth – ECB’s Makhlouf
- ECB policymakers buried the hatchet at Draghi’s farewell meeting according to latest ECB Monetary policy meeting minutes
- ECB chief Christine Lagarde speaks of a new order in the world economy at debut speech
- IHS Markit Flash Eurozone: Eurozone near-stalled for third month running in November
- German Business activity remains subdued despite easing drag from manufacturing
- Further solid increase in French private sector activity during November
- German 3Q adjusted GDP up 0.1%, unchanged from initial estimate
The Swiss Franc
Swiss Headlines and Economic data
Nothing much from Switzerland to influence the Swiss franc this week, with exception to the latest Swiss trade balance data (Swiss foreign trade declined in October 2019; exports was – 5.3%, Imports dropped 2.4%). And the Swiss franc didn’t seem to benefit from the broad global risk aversion environment as U.S.-China trade story headlines leaned more towards further tension than coming resolution for most of the week.
It’s likely the bearish pressure on the franc may have stemmed from continued speculation that the Swiss National Bank will not reverse its policy of negative interest rates and currency intervention any time soon, which was reiterated by SNB Chairman Thomas Jordan just last week.
And the broad move lower on Friday was likely a sympathy move with the euro after manufacturing and services PMI updates continues to signal weakness in the euro area as mentioned above in the Euro review.