"The Swiss economy will have to get used to a weaker economic momentum"
- VP Bank economist Bernd Hartmann
Consumer prices in Switzerland rose less than initially expected last month, due to weak domestic demand and economic uncertainties. Nation's inflation rate added only 0.1% in October following a 0.3% rise in the previous month, while on a yearly basis they lost 0.2%. While consumer prices shrank for the 13th straight month, prices of domestic goods increased 0.1% from a year ago and the cost of Swiss imported consumer goods tumbled 1.2% in the year.
"The Swiss franc is massively overvalued despite the recent intervention from the SNB" Ursina Kubli, an economist at Bank Sarasin in Zurich, said Wednesday. "The franc is set to remain overvalued given the remaining risks of the euro crisis."
"The current strength of the Swiss franc is not due to economic fundamentals, but the fears of financial markets that reinforce its position as a safe haven," SNB President Thomas Jordan said last week.
The Swiss blue-chip index SMI, a measure of the largest and most actively traded companies, dropped 0.71 per cent to 6,697.63. The broader Swiss Performance Index lost 0.74 per cent to stand at 6,172.94.
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