Swiss franc battles upwards
The Swiss franc rose against the US dollar on August 28, 2015. Better-than-expected GDP (gross domestic product) figures lifted the sentiment for the franc. The US Dollar Index gained strength. This caused major currency pairs to wear down. However, the Swiss franc rose against the US dollar. The Swiss economy has been under pressure since the SNB (Swiss National Bank) abandoned its peg with the euro of 1.20 earlier this year.
The move was warranted at a time when the ECB (European Central Bank) was expected to come out with a QE (quantitative easing) program to provide a thrust to the European economy. The franc has been gaining in value ever since the policy change hurt Swiss exports. In July, exports fell by 4.90% on an annual basis.
Swiss GDP rises amid contraction forecasts
The Swiss GDP released at 0.20% on a quarterly basis amid the anticipation of a fall of -0.10%. High investments, consumer spending, and government expenditure contributed to the rise. On an annual basis, the growth magnified to 1.20% compared to the same quarter in the previous year. A slowdown in Europe has been affecting a liftoff in the Swiss economy. However, the Swiss government has been proactive in bilateral dealings by enforcing a free trade agreement with China last year. The Swiss economy may not be out of the woods yet as a slowdown across emerging economies and falling global demand might mean more concerns for Swiss exports.
Impact on the market
Swiss ADRs (American Depository Receipts) were trading on a mixed note. ABB (ABB) rose 0.05%. In contrast, Logitech International SA (LOGI) fell by -0.15% and Credit Suisse Group AG (CS) fell by -0.73%.