Swiss Franc Falls Amid Disappointing Swiss CPI Data

(RTTNews) - The Swiss franc weakened against other major currencies in the European session on Monday, after data showed that Switzerland's consumer price inflation slowed unexpectedly in October after remaining stable in the previous two months.

Data from the Federal Statistical Office showed that the consumer price index rose 0.1 percent on a yearly basis in October, following a 0.2 percent increase in September. Meanwhile, economists had expected the inflation to rise to 0.3 percent.

Prices for food and non-alcoholic beverages were 0.5 percent less expensive compared to last year, and transportation charges dropped by 1.7 percent. On the other hand, education costs grew 2.6 percent, and housing and energy prices were 0.8 percent higher.

On a monthly basis, consumer prices decreased 0.3 percent in October after falling 0.2 percent in September. The expected fall was 0.1 percent.

The Swiss National Bank (SNB) is under continued pressure to lower interest rates below the present 0 percent level due to the disinflationary data. Martin Schlegel, the president of SNB, has been hesitant to acknowledge that possibility, but the lackluster economic momentum and mounting deflationary pressures in the face of the high US tariffs are suggesting otherwise.

Investors monitored the latest trade developments after the White House released details of a new trade and economic agreement reached between U.S. President Donald Trump and Chinese President Xi Jinping in South Korea.

According to the fact sheet, Beijing agreed to suspend new export controls on rare earth metals and end investigations into U.S. firms in the semiconductor supply chain.

In the European trading today, the Swiss franc fell to nearly a 3-week low of 0.8058 against the U.S. dollar, from an early high of 0.8038. The franc is likely to find support around the 0.81 region.

Against the pound, the euro and the yen, the franc dropped to 1.0589, 0.9295 and 191.35 from early highs of 1.0568, 0.9276 and 191.84, respectively. If the franc extends its downtrend, it is likely to find support around 1.08 against the pound, 0.93 against the euro and 187.00 against the yen.

Looking ahead, U.K. S&P Global manufacturing PMI for October is due to be released at 4:30 am ET in the European session.

In the New York session, U.S. S&P Global manufacturing PMI for October is slated for release.