Swiss Franc Climbs Ahead Of Swiss Gold Vote
Brussels (Nov 28) The Swiss franc advanced against its major counterparts in European deals on Friday, ahead of a Swiss referendum on Sunday, which proposes the Swiss National Bank to increase its gold holdings.
An "yes" vote will prohibit the Swiss National Bank from further gold sales, repatriate Swiss-owned gold to Switzerland , and necessitate that gold make up at least 20% of the SNB's assets.
The "Save Our Swiss Gold" initiative, if won, would make harder for SNB to defend its cap on the franc of 1.20 per euro and fulfill its price stability mandate.
Support in favour of gold initiative has been pushed down by the SNB through media. The most recent poll showed 38% in favour, 47% against, and 15% undecided.
In economic news, a measure of the health of the Swiss economy eased slightly in November, survey data from the KOF Swiss Economic Institute showed.
The KOF Economic Barometer fell to 98.7 in November from 99.5 in October, revised from 99.8. Economists had expected an improvement in the score to 100.
The franc rose to 1.2014 against the euro, a weekly high, from yesterday's close of 1.2018. The franc is thus heading to breach its peg rate of 1.20.
Eurozone inflation slowed in November after accelerating slightly in the previous month, preliminary data from Eurostat showed.
The flash euro area annual inflation fell to 0.3% from October's 0.4%. The figure was in line with economists' expectations.
Recovering from an early low of 1.5186 against the pound, the franc advanced to a 1-week high of 1.5098. Next key resistance for the franc may be located around the 1.50 mark.
U.K house prices rose for the second straight month in November, albeit at a slower pace, survey figures from the Nationwide Building Society showed.
The house price index rose a seasonally adjusted 0.3% month-over-month in November, slower than October's 0.5% increase.
Having fallen to 122.07 against the yen at 5:00 pm ET , the franc strengthened to a 1-week high of 123.06. If the franc-yen pair extends its uptrend, it may break record high of 124.00 set last week.
A report released by Japan's Ministry of Internal Affairs and Communication showed that annual core inflation in Japan slowed in line with expectations. Core annual inflation eased to 2.9% in October from 3% in September.
The franc, which slipped to a 3-day low of 0.9670 against the greenback in early deals, reversed direction and was worth 0.9621. Continuation of the franc's uptrend may lead it to a resistance near the 0.955 area.
Source: RTTnews
