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The Swiss franc was the top currency this week, with the euro not too far behind. Both currencies were arguably beneficiaries of a negative leaning risk environment and the European Central Bank, who wasn’t quite ready to talk down the euro’s recent strength.

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:

German Production in July 2020: +1.2% on the previous month

Sentix Investor confidence: -8.0 in Sept. vs. -13.4 in Aug.

Germany’s Scholz eyes more debt to support recovery from coronavirus

Tuesday:

German exports in July 2020: +4.7% m/m

German Labor cost index rises in the 2nd quarter by 1.9% compared to the previous quarter

French trade deficit fell (-1.1 billion euros after +0.7% in June and +2.4% in May)

GDP down by 11.8% and employment down by 2.9% in the euro area

Italian Retail trade: Value of sales -2.2% m/m in July; volume dropped by -3.1% m/m

French Economic Activity Has Returned to 95% Normal Levels

Thursday:

European Central Bank keeps rates and stimulus program unchanged, despite stronger euro – traders were mainly on the look out to see if the ECB saw the strengthening euro as a deterrent to Europe’s recovery, and which is likely why we saw the euro move higher when the market didn’t get that rhetoric (“The Governing Council discussed the appreciation of the euro, but as you know we don’t target the exchange rate,” ECB President Christine Lagarde).

Lagarde comments at ECB press conference

French Industrial production continued to recover but at a slower pace, +3.8% in July vs. +13.0% in June

Italian industrial production rebounds better than expected in July: +7.4% m/m

EU ponders legal action against Britain over plan to break Brexit deal

ECB sees smaller pandemic recession, slow inflation recovery

Friday:

ECB’s Lane Toughens Euro Message With Warning on Inflation

German Inflation rate at 0.0% y/y in August 2020; -0.1% m/m

German Wholesale prices in August 2020: -2.2% on August 2019

President of the Deutsche Bundesbank Jens Weidmann speech

ECB ready to “do more if appropriate” – Villeroy

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:

Europe Coronavirus Cases Are Rising Fastest in These Five Countries

Tuesday:

We saw a broad move higher in both the euro and the Swiss franc during the Tuesday U.S. trading session, which was likely a reaction to the continued U.S. tech sector sell off, prompting traders to rotate from risk assets to safe havens/lower-yielding assets.

Wednesday:

Swiss unemployment rate rose from 3.2% in July 2020 to 3.3% in August

Thursday:

No major catalysts from Switzerland on the session, but we saw a move higher in the franc against the majors during the London session, likely driven by the negative broad risk sentiment environment. This was possibly sparked by rising Brexit uncertainty, rising COVID-19 cases in Europe, or concerns that the global recovery may be slowing.