Forex News

Swiss Franc Lacks Direction With Majors, Friday, September 26, 2008 1:10:25 PM

The Swiss franc posted lackluster performances against its major counterparts on Friday in New York. Traders weighed a report showing the Swiss leading indicator fell less than expected in September.

Indicting continued easing in Swiss economic growth, the KOF leading indicator in September declined further to 0.62 points from a revised 0.73 points in August, the KOF Economic Institute said. The August reading was upwardly revised from 0.68. Economists were looking for a reading of 0.54 for September.

According to the institute, Switzerland`s annual gross domestic product growth will slow in the months ahead. Among the three modules of the KOF indicator, the Core GDP module continued its downward trend. Meanwhile, the construction and banking modules showed a stabilizing effect.

The Swiss franc lacked direction with the dollar on Friday. The pair bounced between 1.0911 and 1.0828 throughout the day, staying below Monday`s multi-week high.

Investors pondered a slew of reports showing U.S. gross domestic product and personal consumption fell unexpectedly in the second quarter, while a University of Michigan survey showed consumer confidence dropped more than expected in September.

Versus the euro, the franc pulled back from a weekly high on Friday. After advancing to 1.5860 by 7:30 am ET, the euro fell back to 1.5909 in the afternoon. Traders digested a report showing French gross domestic product contracted at an expected rate in the second quarter.

Against the pound on Friday, the franc moved with uncertainty. The two currencies moved between 1.9941 and 2.0024, staying above last week`s monthly low.

The Bank of England said it will increase the term of its existing operations to lend US dollar funds against collateral eligible in short-term repos and US Treasuries. Alongside an operation to lend funds overnight, the central bank will lend US$30 billion of funds for one week today. The Bank of England`s overnight dollar repo operations will be US$10 billion on Friday.

posted by Kalin Tasev @ 10:37 AM