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.
European Headlines and Economic data
The Swiss Franc
Swiss Headlines and Economic data
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
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.
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.
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.
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.