The euro declined against the Swiss franc yesterday following the release of worse-than-anticipated Eurozone Sentix investor confidence index data for June. The Swiss inflation data for May was in line with estimates. This further paved the way for the EUR/CHF pair’s decline. Overall, the EUR/CHF pair declined from a high of 0.9752 to a low of 0.9718 in the past 24 hours.
According to Destatis, Germany’s trade surplus rose to €18.40 billion in April from €14.90 billion in March, higher than forecasts of €16.10 billion. The initial estimates pegged Germany’s trade surplus at €16.70 billion.
Exports grew by 1.20% m-o-m in April to €130.40 billion. On a y-o-y basis, exports rose by 1.50% in April 2023.
Imports fell by 1.70% in April to €112 billion. On a y-o-y basis, imports plunged 10.30% in April 2023.
Germany exported goods worth €71.40 billion to EU countries in April 2023. During the same period, the country imported goods worth €59.10 billion.
Also, the value of goods exported to countries outside the EU was €50 billion in April 2023. Likewise, imports of goods aggregated €52.90 billion during the same period.
According to the Swiss Federal Statistical Office, the country’s consumer price index rose by 0.30% m-o-m in May to 106.30 after remaining unchanged in the previous month. The reported figure was in line with economists’ estimates. On a y-o-y basis, Switzerland’s consumer price index grew by 2.20% in May 2023.
The monthly increase was led by a rise in prices for holiday tour packages and housing rentals.
Excluding fresh and seasonal products, energy, and fuel, core inflation inched up 0.20% m-o-m in May to 104.30. On a y-o-y basis, core inflation jumped 1.90% in May.
The domestic products index grew by 0.30% m-o-m to 104.50. Likewise, the imported products index inched up 0.10% to 111.60.
According to the final data published by the Hamburg Commercial Bank (HCOB) and S&P Global, the German services PMI (purchasing managers’ index) increased to a 13-month high of 57.20 in May from 56 in April. The initial estimates pegged the reading at 57.80. Economists did not anticipate any change in the initial estimates.
Fresh export orders grew at a record rate. Also, the volume of backlog rose during the same period. Employment rose against the backdrop of higher input prices and increasing labor expenses. Overall, optimism prevailed among enterprises but declined from prior levels due to worries over high inflation.
The final data published by HCOB and S&P Global indicated that the Eurozone services PMI declined to 55.10 in May from 56.20 in April. The reported figure was below the initial reading of 55.90. Economists did not anticipate any change in the initial reading.
Fresh business grew for the fifth successive month. Employment growth continued while pending orders increased for the fourth successive month, reflecting strain on capacity. Business confidence, although positive, declined to its lowest level this year.
The Eurozone Sentix investor confidence index declined further to -17 in June from -13.10 in the previous month, worse than forecasts of -15.20. The current situation index fell to -15.80 in June from -7 in May. However, the expectations index improved to -18.30 in June from -19.
In the US, the Sentix investor confidence index improved to -3.70 in June from -6.50. The current situation index inched up to 5.50 in June from 5.30. The expectations index improved to -12.50 from -17.50.
In Asia, Sentix investor confidence declined to 3.7 in June from 8.30 in May. The reported figure reflects the fourth decline in a row. The current situation index fell to 6.30 in June from 13.50. The expectations index dipped to a six-month low of 1.30 in June from 3.30 in May.
The worse Eurozone economic data is expected to keep the EUR/CHF pair in a downtrend in the short term.
The historical price chart indicates that the EUR/CHF pair is facing resistance at 0.9760. The next support is anticipated to be near 0.9600. Additionally, the currency pair is trading below its 50-day moving average, while the MACD indicator is showing a negative reading. Therefore, we anticipate the EUR/CHF pair to remain in a downtrend in the near term.
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