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It was a mixed week for both the euro and the Swiss franc, and with a lack of major catalysts from Europe, both currencies were mainly influenced by broad risk sentiment and counter currency flows.

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

Tuesday:

German GDP fell sharply by 9.7% q/q in the 2nd quarter of 2020

German New orders in main construction industry in June 2020: +12.4% m/m

The ifo Business Climate Index rose from 90.4 points (seasonally adjusted) in July to 92.6 points in August.

Germany Earmarks $12 Billion More to Extend Crisis Job Support

Wednesday:

Side effects of negative ECB rates grow over time, Schnabel says

ECB can’t fix causes of negative rates, Schnabel says

Thursday:

Annual growth rate of broad monetary aggregate M3 increased to 10.2% in July 2020 from 9.2% in June

French 2020 economic contraction could be less than forecast 11% -Le Maire

French Business Morale Rebounds in August Despite Surging COVID-19 Cases

Friday:

GfK’s forward-looking consumer-sentiment index is set to fall to minus 1.8 points in September from a revised minus 0.2 in August

German import prices in July 2020: -4.6% on July 2019

French and Spanish Spending Fall Short in Latest Slowdown Sign

In August 2020, French consumer prices increased by 0.2% y/y

France’s GDP contracts by 13.8 pct in Q2: INSEE

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

Wednesday:

After low volatility, choppy moves to start the week, directional bias began to take form on the euro and Swiss franc in the Wednesday session with the bears starting to take control.

This may have been a reaction to broad risk sentiment, which was leaning positive on COVID-19 vaccine headlines (Cambridge university aims for autumn trials of coronavirus vaccine after UK funding) and possibly on news that the pandemic pace broad slows worldwide.

But the performance was diverse across the majors as AUD, NZD, GBP ran higher against the euro and franc, while the CAD, USD, and JPY stayed relatively steady.

Thursday:

Another weak session for the Swiss franc as risk sentiment continued its positive lean, supported further by COVID-19 related headlines (Abbott wins U.S. authorization for $5 rapid Covid-19 antigen test) and the Federal Reserve’s new strategy on inflation.   We saw a uniform move lower during the London session in the franc on news that Switzerland’s GDP fell by -8.2 % in the 2nd quarter of 2020 (after decreasing by -2.5 % in the previous quarter).

Friday:

Despite the positive Swiss sentiment update during the London session (The KOF economic barometer rose sharply in August to 110.2 vs. 86.0 in July) it was a net negative finish for the week for CHF.

Risk sentiment was the likely driver for the continued move lower against most of the majors, but counter currency weakness was a factor for the performance ending up more mixed than a total loss.