"An appreciation of the CHF would compromise price stability and would have serious consequences for the Swiss economy"
- The Swiss National Bank
The unemployment rate in Switzerland remained unchanged last month, holding at the highest level since 2010, raising concerns that the economy is facing major challenges from the neighbouring Eurozone, which is currently in its longest recession since the creation of the single currency. According to the data from the State Secretariat for Economic Affairs, the overall seasonally adjusted jobless rate, remained at 3.2% in June, widely meeting analysts' expectations. At the same time, the unadjusted rate dropped to 2.9%, down from 3.0% a month earlier. The total number of people out of work declined by 47,920 compared with a previous month reaching 126,498 in June. In addition to that, the report showed the number of job openings fell by 161 to 14,647 over the same period.
The domestic demand has underpinned the economy, boosting it up to 0.6% expansion in the first quarter, the rate faster than Europe's largest economy Germany. Even despite obvious risks, the economy is on the right track, benefiting from a Franc cap, implemented by the SNB in September 2011 to prevent deflation and avoid a recession, as well as raising hopes that retail sales will stabilize and the pressure on margins will wane soon. The SNB now expects the GDP growth of 1.0-1.5% for 2013.
© Dukascopy Bank SA