Swiss Franc Slides to Five-Month Low as Economic Outlook Sours

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Switzerland’s franc declined to its weakest level in almost five months against the euro as the economic outlook for the nation worsened.

The Swiss currency fell against 14 of its 16 major peers after data showed consumer confidence plunged to a three-year low. It’s still the best-performing currency this year and the Swiss National Bank has said it sold the franc in recent months to limit its appreciation. Australia’s dollar dropped for a second day after an unexpected jump in unemployment overshadowed data showing a surge in hiring.

“There was some technical levels broken and weak data,” which drove the franc lower, said Peter Rosenstreich, head of market strategy at Swissquote Bank SA near Geneva. Trading patterns and previous SNB action indicated “they could also be helping the market along, taking advantage of thin liquidity,” he said.

SNB spokesman Walter Meier declined to comment when reached by phone on Thursday.

The franc weakened 0.4 percent to 1.0716 per euro at 7:24 a.m. New York time. It touched 1.07215, a level last seen on March 10. The currency slipped 0.4 percent to 98.30 centimes per dollar.

Data on Thursday showed an index of Swiss consumer sentiment declined in July to minus 19, which was the worst reading since January 2012.

Aussie Plunge

The Aussie dropped amid speculation the Reserve Bank of Australia will cut interest rates again if economic growth remains below trend, while the Federal Reserve prepares to raise borrowing costs.

“The headline unemployment number in Australia was pretty disappointing,” said Neil Jones, head of hedge-fund sales at Mizuho Bank Ltd. in London. “I kind of get the sense market participants around the world are looking for reasons to sell the Aussie. They are ignoring the good data and focusing on the poor data.”

Australia’s dollar fell 0.4 percent to 73.28 U.S. cents. New Zealand’s dollar gained 0.4 percent to 65.34 U.S. cents, rallying from a six-year low of 64.91 set in New York on Wednesday.

The number of people employed in Australia rose by 38,500 in July, government data showed, compared with the median forecast for a 10,000 increase. The jobless rate climbed to 6.3 percent from a revised 6.1 percent.

The U.S. dollar has climbed this week amid speculation a payroll report on Friday will add to signs the world’s largest economy is ready for a Fed rate increase. Employers hired 225,000 workers in July, according to a Bloomberg survey. The greenback was little changed at 124.86 yen and $1.0901 per euro.

The Bloomberg Dollar Spot Index, which tracks the currency versus 10 major peers, was at 1,218.01 after climbing to 1,219.31 on Wednesday, the highest since March 16.

The Bank of Japan began a two-day policy meeting Thursday. The yen has stayed above a 13-year low of 125.86 per dollar reached in June since Bank of Japan Governor Haruhiko Kuroda said he couldn’t see the nation’s exchange rate sliding much further when adjusted for inflation and trade.

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