There was no love for the euro or the Swiss franc despite better-than-expected economic updates from Europe, suggesting no-deal Brexit fears may have been the big theme of the week.
The Euro
European Headlines and Economic data
Monday:
ECB’s Lagarde shifts burden to governments to aid recovery
EU to delay euro clearing decision on Brexit divorce threat
ECB’s Makhlouf sees continued fall in prices during pandemic
Tuesday:
German ZEW investor sentiment rises despite Brexit, COVID-19 headwinds
Annual growth in labour costs at 4.2% in euro area; 4.1% in EU
Wednesday:
Chances of Brexit deal fading every day, EU Commission chief says
Euro area international trade in goods surplus €27.9 bn; €25.8 bn surplus for EU
ECB’s Holzmann says low rates harmful in long term
Thursday:
Annual inflation down to -0.2% in the euro area; Down to 0.4% in the EU
EU’s Barnier still hopes trade deal with Britain possible, sources say
Friday:
German Producer prices in August 2020: -1.2% on August 2019
The Swiss Franc
Swiss Headlines and Economic data
Tuesday:
Swiss Producer and Import Price Index fell in August 2020 by 0.4%
Wednesday:
Strong turn lower in the franc during the U.S. session, likely moving lower as broad risk sentiment rose ahead of the FOMC statement. It’s also possible that the rising probability of a no-deal Brexit scenario is putting pressure on the euro and franc.
Thursday:
August 2020: For the first time since March, exports exceeded the 18 billion franc mark – This resulted in a trade surplus of CHF 3.4B.
Friday:
We saw a round of net weakness in the Swiss franc despite broad negative risk sentiment during the Friday session (thanks to a combination of scenarios ranging from a low expectancy of a new stimulus package from the U.S. government, the possibility of the U.K. locking down once again, and as the U.S. tech sector continues to fall), suggesting counter currency flows and Brexit fears were the main drivers for the lean lower in the franc.