Swiss franc falters on returning risk appetite
The Swiss franc posted its biggest daily drop against the US dollar in nearly three weeks on Monday as investor concern over geopolitical risks eased and Japan posted solid economic data.
"Some investors had gone very short on risk last week on the geopolitical events and there is some short covering," Neil Jones, head of FX sales at Mizuho Bank in London, said.
The franc fell 0.8 percent against the US dollar to 0.9694 francs, its biggest drop since July 27 according to Thomson Reuters data. It gained more than 1 percent last week on escalating tensions between North Korea and the United States.
World stocks also showed signs of relief after fears of a nuclear stand-off drove them to the biggest weekly losses of 2017 last week, while volatility ebbed.
Chinese President Xi Jinping called on Saturday for a peaceful resolution to the North Korean nuclear issue, and in a call with US President Donald Trump urged all sides to avoid words or action that raise tensions.
With Japanese second-quarter growth expanding 1 percent quarter-on-quarter, fuelled by rising consumption and capital expenditure, investors stepped in to buy risky assets after tensions over North Korea.
Meanwhile, the dollar edged higher against a trade-weighted basket of currencies after posting its biggest weekly drop in three weeks as expectations of US rate increases dwindled further after weak inflation data.
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