- Swiss National Bank
The Swiss National Bank reiterated its view that the Swiss Franc is considerably overvalued, despite spending hundreds of billions of francs on interventions to push the nation's currency lower. A strong Franc is expected to further hit Swiss exporters, who have already been suffering. Earlier in the year the central bank surprisingly abandoned its ceiling on the Franc of 1.20 per Euro, triggering a massive turbulence in the global markets. Moreover, economists suppose that the SNB may intervene in the FX markets in order to limit the appreciation in the Franc in case the European Central Bank deploys further stimulus. Euro zone stimulus could further hamper efforts to keep the Swiss Franc at its current 1.08 franc level versus the Euro, and expectations for the Franc to strengthen against its key trading partners' currency increased.
Meanwhile, confidence among Swiss businesses in the nation's economy slid from the highest level in 18 months in October, signalling that investors expect no change in factors weighing against growth. The Swiss ZEW investor sentiment index dropped for 18.3 points to 0 in the current month. Moreover, assessment of current conditions worsened.
© Dukascopy Bank SA