FOREX-Swiss franc posts biggest weekly rise in 4 months

An image of a person looking at a financial report
Credit: Shutterstock photo

* Graphic: World FX rates in 2018

By Saikat Chatterjee

LONDON, Dec 28 (Reuters) - Safe-haven currencies like theJapanese yen and the Swiss franc were set for big gains againstthe dollar on Friday as investors cut positions in risky assetsafter a volatile week and growing concerns about U.S.-Chinesetrade disputes.

The Swiss franc CHF=EBS in particular is on track for itsbiggest weekly rise in nearly four months, up 1.5 percent thisweek in thin year-end trading that has sapped appetite for risk.

While the dollar has generally held up well against itsrivals in the last two weeks despite dwindling expectations offurther interest rate increases from the Federal Reserve nextyear, Friday's session saw investors consolidating positions.

"This looks like a classic risk aversion trade in currencymarkets," said Thu Lan Nguyen, an FX strategist at Commerzbankin Frankfurt.

The yen JPY=EBS gained 0.7 percent at 110.23 against thedollar while the Swiss franc strengthened by a similar margin.

The dollar index .DXY , a gauge of its value versus sixmajor peers, extended losses and declined by around 0.3 percentto 96.22, after losing 0.5 percent overnight.

"The broad environment is a bit more tentative for risktaking and the dollar looks to be struggling thanks to volatileU.S. stocks," said Lee Hardman, FX strategist at MUFG in London.

Weak economic data also weighed, with Japanese industrialoutput contracting in November and partially reversing gainsregistered in the previous month, indicating headwinds for theglobal economy.

Data also showed consumer confidence at its weakest in morethan three years in the United States, as well as an unexpecteddrop in industrial profits in China - stark reminders forinvestors of the deteriorating global growth outlook.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

In This Story


Other Topics

World Markets Politics


Reuters, the news and media division of Thomson Reuters, is the world’s largest international multimedia news provider reaching more than one billion people every day. Reuters provides trusted business, financial, national, and international news to professionals via Thomson Reuters desktops, the world's media organizations, and directly to consumers at and via Reuters TV.

Learn More