Slow Data Week sees CHF Nevertheless Rise in Pairing as Australian Economy Plods on
The Swiss Franc has performed exceptionally well with 1.4793 against the Australian Dollar today, and has maintained its strength against the ‘Aussie’ for the past month, remaining close to 1.4881, its highest conversion rate in 10 years today.
This week has actually been fairly positive for the Australian Dollar in the pairing, but the trouble with a number of data releases coming up in the green has been that these figures simply haven’t been enough. The task at hand is to stave off growing concerns from speculators regarding the decline of the Australian mining industry over the past few years, particularly in the area of iron ore extraction and exportation. The sector is a key one for the Australian economy, but as of late, profits for some of the country’s biggest mining companies have been diving, as have orders from China due to its economic slowdown.
The Chinese lack of demand has hit the ‘Aussie’ particularly hard in the last week, as steel mills in and around Beijing have been shut down to clear the skies over the Chinese capital for a commemorative military parade. A fundamental failure for a suitable sector to emerge as the alternative for Australia’s mining industry can be considered the cause of the indifferent reaction to this week’s ‘Aussie’-positive Australian news, such as the Private Sector Credit for July rising along with the Manufacturing Index for August.
The Franc has had comparatively few economic announcements this week, although those that have been made boosted the ‘Swissie’ considerably. These were the KOF Leading Indicators score for August, which came in at 100.7 compared to the forecast drop to 99.3, and the SVME Manufacturing PME for August which jumped up from 48.7 to 52.2.
The CHF advantage today is particularly notable due to the price of gold dropping once again from $1140 per 100 ounces to just above $1120. However, such a potential detractor to the ‘Swissie’ was negated by the monthly Swiss inflation rate rising by 0.4%
Employment to Decide Leader in CHF-AUD Exchange Rate Next Week
The coming week is fairly sparse for Swiss economic releases, with the only major publications released on Tuesday. These are the Unemployment Rate for August and the Retail Sales figures for July. No change is expected to take place in the former result but a predicted marginal rise above a negative figure for the annual Retail Sales figure may boost confidence in the ‘Swissie’ considerably.
The Australian Dollar will be most affected by the NAB Business Confidence Index for August and the Employment and Unemployment figures for the same month. No change has been predicted in the Unemployment outcome, but the forecast increases in the Employment statistics have the potential to off-balance any sudden rally in the CHF-AUD pairing.