"The SNB will continue to enforce the minimum exchange rate with the utmost determination. It is prepared to purchase foreign currency in unlimited quantities, and if necessary, it will take further measures immediately."
- Swiss National Bank
Trade balance in Switzerland registered a decline in August for the first time since May, as deliveries to country's largest economic partners dropped. Trade surplus reached 1.39 billion francs, compared to 3.90 billion francs in July. Exports slid 3.4% on the annual basis to hit 14.859 billion francs mark, as German-only purchases went down 10.2%. Germany is Switzerland's biggest trade partner, while the whole EU accounts for 60% of country's exports. International sales of electronic products and machinery went down 7.3%, while deliveries of pharmaceuticals and chemicals plunged 5.5%. Watches' exports, in turn, added 0.7% in real terms to 1.493 billion francs. At the same time, some weakness can be explained by a fewer number of working days in August of the current year versus the previous year.
In addition to trade data on Thursday, the Swiss National Bank held its quarterly meeting the same day. It decided to keep the main three-month Libor interest rate unchanged in the 0-0.25% range, despite wide expectations of the negative rate among analysts. Moreover, the SNB left the Euro-Franc exchange rate cap at 1.20 level. However, Bank's officials admitted that economic conditions worsened and franc is still very expensive. For improvement purposes, the SNB is ready to intervene on the foreign exchange market, with purchasing unlimited amount of foreign currency.
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