ZURICH: The Swiss franc dropped against its most major rivals in the European session on Tuesday amid risk appetite, as oil prices steadied and a raft of encouraging corporate earnings underpinned investor sentiment.
German lender Commerzbank posted a 28% rise in first-quarter net earnings, while Zurich-based Adecco reported better-than-expected earnings for the first quarter.
Oil prices were supported on expectations that an OPEC-led deal to cut output would be extended through the rest of 2017.
In France, former Socialist Prime Minister Manuel Valls said he wants to sign up to President-elect Emmanuel Macron’s party to fight the parliamentary elections scheduled for June 11 and 18.
Data from the State Secretariat for Economic Affairs showed that Switzerland’s unemployment rate remained stable, as expected, in April.
The jobless rate held steady at seasonally adjusted 3.3% in April. The rate came in line with expectations.
On an unadjusted basis, the unemployment rate dropped marginally to 3.3% from 3.4% a month ago.
The franc traded mixed in the Asian session. While the currency fell against the greenback and the pound, it held steady against the euro. Against the yen, it rose.
The franc dropped to 1.0024 against the greenback, its weakest since April 18. The next possible support for the franc is seen around the 1.02 level.
The franc weakened to 1.0923 against the euro, a level not seen since October 2016. The franc is seen finding support around the 1.2 mark.
Data from Destatis showed that Germany’s exports increased more than expected and imports rebounded in March.
Exports grew 0.4% in March from the prior month, faster than the expected 0.2% rise. However, the monthly rate eased from 0.9%.
Reversing from an early high of 1.2906 against the pound, the franc declined to an 8-month low of 1.2954. Continuation of the franc’s downtrend may see it challenging support around the 1.32 region.
Data published by the British Retail Consortium and KPMG showed that UK retail sales increased in April as the performance was positively distorted by the timing of Easter.
On a like-for-like basis, retail sales increased 5.6% in April from the prior year, when they decreased 0.9%
On the flip side, the franc extended early rally to 113.74 against the yen, compared to Monday’s closing value of 113.35. If the franc extends gain, 115.00 is likely seen as its next resistance level.
Looking ahead, Canada building permits for March and wholesale inventories for April are set for release in the New York session.
At 9:00 am ET, Minneapolis Fed President Neel Kashkari speaks before the Minnesota High Tech Spring Conference in Minneapolis
