Swiss Franc (CHF) Exchange Rate Firmer on Increased Safe Haven Demand
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The Franc to British Pound exchange rate was also trading firmer.
The reason for the Franc’s rise was the increased demand for safe haven assets and a weakening of risk sentiment.
Tensions in Ukraine escalated after Ukrainian forces took control of government buildings in the east of the country and ousted pro-Russian separatists, and yesterday’s disappointing economic data releases out of China and the United States also dampened investor appetite.
Investors are also concerned that the USA and its allies could impose harsher sanctions against Russia if the country does not halt the actions of the separatists, sanctions that could have a negative impact upon the global economy.
Also supporting demand for the Swiss Franc was yesterday’s disappointing new home sales data out of the United States.
The number of homes sold fell to a seven-month low, taking economists by surprise and raised fears that the nation’s housing market is facing bigger challenges than first thought. Manufacturing data also disappointed the markets.
Chinese manufacturing PMI data also weighed upon sentiment; PMI edged higher but remained below the 50 level which indicates expansion.