7 March 2002, 11:15   Swiss franc shrugs off GDP data, rate cut talk ends

ZURICH, March 7 - The Swiss franc shrugged off news on Thursday that the Swiss economy continued to grow in the fourth quarter, albeit at an annualised rate of only 0.1 percent versus the third quarter, traders said. Year-on-year growth halved to 0.4 percent from 0.8 percent in the third quarter, but the government maintained its forecast of 1.3 percent GDP growth this year. "The numbers had no impact at all," one senior dealer said, but noted the dollar was near a critical levvel of 1.6775 to 1.68 francs that had to hold to prevent a sharp slide. He said the market was seeing purchasing of yen and euro by investors who wanted to put money into stock markets there. Money market rates also were little changed. One dealer said the data had cleared away any speculation that the Swiss National Bank could cut interest rates again after easing policy four times in 2001. "Now the market has to get positioned for a rate rise, although I still don't think this will happen before the end of September. Inflation will stay low for the time being," he said. The dollar was trading around 1.6833/37 francs at 0740 GMT, little changed from levels seen late on Wednesday in Europe. The euro EURCHF was off overnight lows to trade at 1.4758/60 francs.

© 1999-2024 Forex EuroClub
All rights reserved