Franc hovers near five-week trough after cold Swiss inflation data
The Swiss franc tumbled in European trade on Thursday against a basket of major rivals, resuming losses against the US dollar and almost hitting five-week lows after Swiss inflation data.
The weak pressures on prices will likely prompt Swiss National Bank policymakers to cut interest rates in September for the third time this year.
The Price
The dollar fell 0.3% against the Swiss franc to 0.9038, with a session-low at 0.9000.
The franc closed Wednesday up 0.3% against the dollar, on track for the first profit in three days away from five-week lows at 0.9050.
Swiss Inflation
Earlier Swiss data showed consumer prices rose 1.3% y/y in June, below estimates of 1.4%.
On a monthly basis, prices were flat, below estimates of a 0.1% rise.
The data all but confirms a third Swiss interest rate cut by the SNB later this year.
The SNB
At the June 20 meeting, the Swiss National Bank voted to cut interest rates by 25 basis points to 1.25% in a surprise move for markets.
The SNB became the first major central bank in March to start the process of policy easing and rate cuts to boost the economy.
The SNB believes that local inflation has come under control, although it asserted it’ll keep monitoring the situation and intervening when needed.
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Aussie climbs after strong retail sales data
The Australian dollar rose against most major rivals on Wednesday after stronger than expected data.
Government data showed Australian retail sales rose 0.6% last month, while analysts expected a rise of 0.3%.
Australia’s building permits surged by 5.5% in June, passing estimates of a 1.5% increase.
On trading, the AUD/USD pair rose 0.6% as of 20:26 GMT to 0.6706.
Loonie
The Canadian dollar rose 0.3% against its US counterpart as of 20:26 GMT to 0.7335.
US Dollar
The dollar index fell 0.3% as of 19:46 GMT to 105.4, with a session-high at 105.8, and a low at 105.05.
Earlier ADP data showed the US private sector added 150 thousand new jobs in June, down from 157 thousand in May.
US unemployment claims rose to 238 thousand last week from 234 thousand.
The Federal Reserve released the minutes of its last policy meeting, which underlined the concerns of policymakers about the economic outlook and the persistent inflation above targets,
Some participants even said if inflation remained at current levels, there might be a need to raise interest rates.
Wall Street will close tomorrow for the Fourth of July holiday.
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Oil extends gains after sharp drop in US stocks
Oil prices rose on Wednesday and expanded the gains after US inventory data showed a sharp drawdown.
The Energy Information Administration reported a sharp drawdown of 12.2 million barrels in US crude stocks last week to 448.5 million barrels, while analysts expected a drop of 0.4 million barrels.
Gasoline stocks fell by 2.2 million barrels to 231.7 million barrels, while distillate stocks fell by 1.5 million barrels to 119.7 million barrels.
The EIA also reported no change in US crude stocks at 13.2 million barrels last week, however, demand on oil rose by 385 thousand bpd last week.
On trading, Brent September futures rose 1.3%, or $1.1 to $87.34 a barrel.
US crude August stocks closed up 1.3%, or $1.07 at $83.88 a barrel.
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US crude tobmels tumble by over 12 million barrels
The Energy Information Administration reported a sharp drawdownn of 12.2 million barrels in US crude stocks last week to 448.5 millionm barrels, while analysts expected a drop of 0.4 million barrels.
Gasoline stocks fell by 2.2 million barrels to 231.7 million barrels, while distillate stocks fell by 1.5 million barrels to 119.7 million barrels.
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