Stronger Swiss Franc Against Euro and Sterling

March 19, 2010

The dollar lost 0.2% against the Swissy but shows gains of 0.7% against sterling and 0.3% relative to the euro.  Relative to commodity-sensitive currencies, the greenback is up 0.4% against the Canadian and New Zealand dollars but unchanged versus the Aussie dollar.  The U.S. dollar is 0.1% firmer against the yen.

Oil and gold prices have eased 1.2% and 0.3% to $81.69 per barrel and $1123.80 per ounce.

A new member of the Swiss National Bank Board, Professor Jean-Pierre Danthine, suggested that it’s time to prepare for higher interest rates and a more market-determined franc.  Commenting on the remarks, spokesmen for that central bank reiterated that currency policy directed at capping franc strength against the euro had not changed.

EU governments remain divided over giving aid to Greece.  PM Papandreou is running out of time to reduce interest rates before Greece must raise large amounts of money.  He may need to go to the IMF.

Stocks are generally firmer, with gains of 0.8% in Japan and China, 0.7% in South Korea, 2.1% in Thailand, 0.4% in India and 0.2% in Australian and Hong Kong.  In Europe, the British Ftse, Paris Cac and German Dax are up 0.5%, 0.4% and 0.2%.

Ten-year British gilt yields fell 4 basis points.  German bunds and Japanese JGBs are off a single basis point each.

This will be a light day from a data release standpoint.

Japan’s all-industry index soared 3.8% in January, some 2.5 times as much as forecast and recorded an on-year increase of 2.9% following drops of 3.7% in the year to 4Q09 and 8.0% in calendar 2009.  In comparisons of January to December, construction leaped 17.3%, while services and industrial production scored similar rises of 2.7% and 2.9%.  Public-sector spending lagged with a 0.2% uptick.  The all-industry index, a supply-side proxy for GDP, was 3.7% higher in January than the average fourth-quarter level.

Japanese department store sales fell 5.4% in the year to February, similar to January’s on-year drop of 5.7%.

German producer prices were flat in February and 2.9% lower than a year earlier.  The 12-month rate of drop had been 3.4% in January and 7.6% last September.  The PPI fell 4.2% in 2009 after increasing 5.3% in 2008.

Credit card spending growth in New Zealand accelerated to a gain of 1.1% in February.

Taiwanese export orders were 36.3% higher in February than a year earlier.  Malaysian consumer prices increased 1.2% in the year to February.

Canada releases CPI and retail sales.  The Bank of Mexico is not expected to change interest rates.  No U.S. data today.

Copyright Larry Greenberg 2010.  All rights reserved.  No secondary distribution without express permission.



Comments are closed.