Swiss Franc Weakens On Brexit Deal Expectations

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The Swiss franc depreciated against its major rivals in the European session on Thursday, as investor sentiment lifted up following reports that Britain and the European Union were on the brink of striking a trade agreement after a compromise on fishing rights.

Officials are finalizing the details of a deal in Brussels, with an announcement due today.

Irish foreign minister Simon Coveney told RTE Radio that there was “some sort of last-minute hitch” as both sides finalize the text of the agreement on fishing rights.

The two sides have agreed to a new five-and-a-half year transition period on fishing rights, which will cut the EU’s fishing quota by a quarter.

A deal would end the likelihood of the two sides imposing border checks and import taxes on each other’s goods from next year.

The franc weakened to 0.8905 versus the greenback, from a high of 0.8869 hit at 9:30 pm ET. If the currency falls further, 0.92 is likely seen as its next possible support level.

The franc reversed from an early high of 1.0816 versus the euro, with the pair trading at 1.0856. On the downside, 1.10 is possibly seen as its next support level.

The franc edged down to 116.37 versus the yen, after rising to a 2-day high of 116.78 at 7:45 pm ET. The currency is poised to face support around the 119.00 region.

Data from the Bank of Japan showed that Japan’s services producer prices declined for the second straight month in November.

The services producer price index dropped 0.6 percent annually, following a 0.5 percent decrease a month ago.

The Swiss currency dropped to more than a 3-week low of 1.2101 against the pound from yesterday’s closing value of 1.1979. The currency is likely to target support around the 1.24 level.


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