The Swiss franc gained against both the euro and the dollar in the European session as gloomy economic sentiment data in the euro zone and dovish minutes from the U.S. Federal Reserve boosted the appeal of the safe-haven currency.
Meeting notes from the U.S. Federal Reserve August 9 meeting showed some policymakers were in favour of stronger action to be taken to stimulate the ailing U.S. economy and discussed a range of unusual tools they could use to spur growth, adding to expectation of further monetary easing. Further quantitative easing will result in flooding the system with dollars and weaken the dollar. Investors are turning to safe havens like the Swiss currency to protect their investments.
Meanwhile, a stream of recent economic data from Europe show that growth in the euro zone is still sluggish and economic sentiment fell more than expected in August, further buoying the Swiss franc.
Franc strength has worried the Swiss National Banks recently as it could harm the country’s exports. The bank has taken measures to curb franc strength by cutting interest rates to near zero. Later today the Swiss cabinet is also expected to outline details of a 2 billion franc package it announced earlier this month to help cushion the impact of the strong franc on the export and tourism sectors.
USDCHF fell from an early European session high of 0.8172 to 0.8107 by 07:55 GMT.
EURCHF fell to 1.1706 from 1.1799.