The EUR to CHF exchange rate fell hard yesterday in trading sessions. The continues release of week data from the eurozone caused the single currency to dive in Thursday’s trading.
The first data that caused the euro’s downward rally is the huge drop in Netherlands’ trade balance. The value between exported and imported goods and services for last month declined from €4.78 billion to €4.13 billion.
The next once is the contraction in the German Consumer Price Index from 0.5% to 0.2%. The data from the report may have met its forecast, it still weighed on the weakening euro.
The third fundamental that caused the EUR to CHF rate to plummet is the disappointing data from Italy. The quarterly Italian unemployment rate dipped from its previous reading of 10.3% to 9.9%.
Fourth is the Eurozone Industrial Production data that declined more than expected. The euro traders were shocked from the upsetting drop to 0.4% in July from 1.4% in June.
Thee EUR to CHF trading pair fell by 0.43% or 0.0046 points in Thursday’s trading sessions. The EUR to CHF exchange rate recorded levels between Fr1.0851 and Fr1.0962 yesterday.
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ECB: How Low Can It Go?
Perhaps the biggest factor to the downfall of the EUR to CHF yesterday is the massive bomb dropped by the ECB.
The European Central Bank indeed deliver a groundbreaking stimulus package during their meeting yesterday. The parting gift of Mario Draghi surprised traders who were already preparing for extremes.
Draghi announced the huge new bond-buying program in a bid to stimulate the faltering eurozone economy. The ECB’s quantitative easing program will require €20 billion per month of net asset purchases.
The restart in bond purchases will start on November and will last until deemed necessary by policy makers. Aside from that the bank will also reduce its main deposit rate to record lows by 10bps to -0.5% from -0.4%.
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