This week, the Swiss franc has weakened by nearly 2% against sterling, thanks to a number of negative factors: retail sales year-on-year fell to -2.8%, ZEW economic expectations remained negative at -0.1%, and the markets predicted that next week’s employment level figure will fall. This is not all bad news though – the Swiss purchasing power abroad will be damaged, but it will dramatically improve their ability to export, and hopefully help them combat deflation which is currently -1.1%.
This week South Africa has reported an increase of 0.5% in year-on-year inflation, moving to 4.5%. However, this was followed by month-on-month retails sales falling by -0.5%, significantly below expectations. Both these economic indicators revealed poor results for the South African economy, causing uncertainty in the markets – and this was most likely the primary driver for the 0.62% depreciation their currency saw yesterday against sterling.
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