"The SNB currently faces no pressure to exit its very expansionary monetary policy. For 2014, we expect the SNB to keep the exchange rate floor unchanged."
-Maxime Botteron, an economist at Credit Suisse
It seems that investors have lost their interest in Swiss fundamental data, and the only thing that has some impact on the Franc's exchange rate are SNB meetings, where they usually reiterate the pledge to defend the cap for as long as it is needed. On Wednesday the joint report from the European Economic Research and Credit Suisse showed that after the temporary setback in November, the investor sentiment index increased by 7.8 point hitting 39.4, the highest level since May 2010, when it stood at 40.5. Moreover, the current situation index rose by 14.8 points to a level of 48.5. While these figure are pointing at accelerating growth, the expectations regarding the performance of the Swiss Market Index (SMI) have eased to 38.6 in December. When comparing the same index with its level seen in October 2013, it stood at 62.0. The main reason behind such a low level is first of all the coming tapering by the U.S. Federal Reserve. Nonetheless, improvements in the assessment of both Swiss and European economies are suggesting the ongoing recovery with rekindle demand for Swiss industrial goods, contributing to growth for at least next six months.
Taking into account better-than-expected data from the Alpine country it is hard to explain Franc's movements on Wednesday, as it has depreciated against the basket of other currencies, with EUR/CHF rising to 1.2235, while USD/CHF climbed to 0.8902.
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