Saturday, June 12We Break the News

Swiss Franc at 3-Month High, Sterling Appreciates on Upbeat Economic Data, Dutch Household Spending Falls the Least in a Year, Spanish Stocks at Near 15-Month High

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Swiss Franc at 3-Month High
The Swiss Franc crossed 0.90 per USD, the highest level since February 23rd after easing concerns over Fed’s monetary policy tightening led to a selloff in the greenback while a worsening coronavirus outbreak in Asia prompted a rush to safety. Also, recent data showed domestic factory activity rose to an all-time high in April, signaling a broad-based recovery in Swiss manufacturing. Switzerland’s consumer prices rose for the first time in 15 months in April, in line with forecasts. Meanwhile, further large-scale relaxations on lockdown restrictions are not expected to occur in Switzerland until the end of May. On the monetary policy front, the SNB in March kept its pledge to curb upward pressure on the franc, through direct intervention in the foreign exchange market, while holding its interest rate unchanged in negative territory. Growth projections remain solid for the next two years, while inflation forecasts predict a rebound in consumer prices in the second quarter of 2021.
Sterling Appreciates on Upbeat Economic Data
The British pound touched $1.42 for the first time since February 24th, its second-highest level since April 2018, after stronger-than-expected economic data suggested that the UK labor market has been broadly stable in recent months, with some early signs of recovery. The first-quarter jobs report showed a continued fall in unemployment, a further rise in vacancies to pre-pandemic levels, and growth in the employment rate. Elsewhere, sterling has been also supported by expectations that Britain’s economy would continue to recover solidly, as well as broad dollar weakness as inflation fears eased. Traders now await the releases of PMI surveys later this week, as well as figures on inflation and retail sales.
Dutch Household Spending Falls the Least in a Year
The household spending in the Netherlands went down 0.4 percent year-on-year in March of 2021, the smallest decrease in the current sequence of decreases that began in March 2020 amid the Covid-19 pandemic, partly due to a low base effect. In addition, some coronavirus restrictions were lifted and from 3 March 2021 it became possible to shop by appointment and go to the hairdresser. In March, consumers spent less on services (-3 percent) and food (-0.6 percent) than the year before, but more on durable goods (6.9 percent).

Spanish Stocks at Near 15-Month High
The IBEX 35 traded higher around 9,221 on Tuesday, its highest since February 26th, in line with its European peers, as inflation fears eased and market sentiment continued to be supported by optimism around the reopening of European economies. Locally, as Spain’s vaccination drive goes up a gear, the number of Covid-19 infections, hospitalizations and deaths is dropping.

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