- Lennon Sweeting, dealer at USForex Inc.
Retail sales in the Alpine country rose considerably more than expected in June following a dip in the previous month, fuelling optimism over the Swiss economy health. Swiss retail sales jumped 3.4% year-on-year, according to the Federal Statistics Office. The May's figure was revised to a 0.5% decline from a previously recorded decrease of 0.6%. Retail sales of food, drinks and tobacco reported an increase in real turnover of 2.5%, whereas the non-food sector registered positive growth of 3.6%, the office said. Following the data release, the Swiss Franc retreated slightly versus the U.S. Dollar, with USD/CHF rising 0.08% to trade at 0.9060.
The Swiss Franc, considered to be a safe-haven currency, is supported by investors seek for the relative safety amid the geopolitical tensions in the Middle East. In times of geopolitical stress, the Swiss Franc along with Japanese Yen are the favoured currencies because of their deep liquidity. Nevertheless, investors' interest also put a drag on the country's companies including Nestle, the world's biggest food company, which has recently reported profit fall by 9.5% in the first half of the year, as the strong Swiss currency hurt earnings. The SNB is determined to keep its Franc cap for a prolonged period to support nation's producers and exporters as well as to ensure price stability for the foreseeable future.
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