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It was a relatively quiet week for the euro and the Swiss franc, with price action mainly driven by global risk sentiment and counter currency flows.

Overall, the euro steadily moved lower (likely on continued Brexit uncertainty, EU data & fiscal worries) while the franc found buyers, likely on increasingly negative risk sentiment and headline news.

The Euro

Overlay of EUR Pairs: 1-Hour Forex Chart
Overlay of EUR Pairs: 1-Hour Forex Chart
EUR Weekly Performance from MarketMilk
EUR Weekly Performance from MarketMilk

European Headlines and Economic data

Monday:

Euro area international trade in goods surplus €2.9B; €0.2B surplus for EU

EU and UK agree to speed up Brexit trade talks with the transition period expiring in six months

Tuesday:

Investors confident of German economic upturn by September – ZEW

Wednesday:

Germany’s Scholz: EU should get its own revenues

Germany urges EU to plan for possible ‘no deal 2.0’

Annual inflation down to 0.1% in the euro area
Down to 0.6% in the EU

Thursday:

Italian trade balance dropped sharply in April 2020 to -1.1B Euros

EU Signals Compromise on Fish, Courts in Brexit Deal

Friday:

EU parliament wants new EU taxes to finance recovery fund, EU budget

German Producer prices in May 2020: -2.2% on May 2019

In April 2020 the current account of the euro area recorded a surplus of €14B, compared with a surplus of €27B in March 2020.

The Swiss Franc

Overlay of CHF Pairs: 1-Hour Forex Chart
Overlay of CHF Pairs: 1-Hour Forex Chart
CHF Weekly Performance from MarketMilk
CHF Weekly Performance from MarketMilk

Swiss Headlines and Economic data

Monday:

We saw global risk-off sentiment during the Asia session to lift the franc and the euro, thanks to rising coronavirus cases headlines (Beijing Locks Down Part of City After Virus Outbreak at Market) and weaker-than-expected Chinese data

Swiss Producer and Import Price Index fell in May 2020 by 0.5%

Global risk sentiment shifted back towards positive during the U.S. trading session to send the franc lower after better-than-expected U.S. economic data (Empire State index shows stable conditions in June after two months of record declines) and an announcement from the Federal Reserve that they will start buying individual corporate bonds.

Tuesday:

Swiss economy expected to shrink by worst rate in decades

Risk aversion sentiment picked up during the U.S. session to give CHF bulls some legs against the risk currencies. This was likely a reaction to Fed Chair Powell’s testimony that the Fed will not be aggressive with corporate bond buying and that the economy faces “significant uncertainty” on a recovery. 

Thursday:

We saw risk-on sentiment during Asia trading (likely a reaction to weak New Zealand GDP data and huge job losses data from Australia) that likely pushed the franc lower, but traders got a bit more bullish on risk during the London session (possibly on more stimulus coming from the BOE and/or China’s pledge of economic support). Price action turned very mixed as risk sentiment behavior clashed with the Swiss National Bank’s latest monetary policy statement.

Swiss National Bank signals need to maintain negative rates

SNB Signals Stronger Currency Intervention, If Needed

Swiss trade balance closed May with a surplus of CHF 2.8B

SNB Financial Stability Report Warns of Bank Losses

Friday:

The Swiss franc was able to maintain its gains on Friday, likely due to the continued negative risk sentiment during the U.S. session. Once again, it was coronavirus fears that sparked the risk-off rally, this time off of news that Apple will close some stores again in states that are seeing a resurgence of Covid-19 cases.