The euro eeks out a net gain against the majors while the Swiss franc takes an “L” in a mixed week. The euro’s gains came mainly against the safe havens, suggesting that price action was mainly driven by this week’s risk-on lean in the financial markets. European economic updates were arguably net positive, and may have been a factor in the euro’s gains against some of the majors as well.
The Euro
European Headlines and Economic data
Monday:
IHS Markit Eurozone Manufacturing PMI: 54.8 in October vs. 53.7 in September
German Manufacturing continues to bounce back as new orders show record increase
October sees modest improvement in French business conditions
Tuesday:
EU to consider escalating legal dispute with Britain over divorce treaty
Brexit talks fail to agree on fisheries, two other issues
Wednesday:
ECB likely to add new stimulus measures in December, ECB’s De Cos says
German Services activity slips back into contraction in October as second wave of coronavirus hits
Eurozone services business activity contracts at a faster pace in October: 46.9 vs. 48.0 September
French business activity falls in Oct as services weaken: PMI
Thursday:
Eurozone Construction activity falls further in October
German manufacturing new orders were up 0.5% m/m
Friday:
EU Commissioner Breton sees 50/50 chance of Brexit deal
German Industrial production rose 1.6% m/m in September 2020
Italian Retail trade decreased by -0.8% m/m in September 2020
French private payroll employment rebounded by 1.8% in Q3 2020
The Swiss Franc
Swiss Headlines and Economic data
Monday:
After an early positive start, likely due to rising pandemic fears and speculation of an economic slowdown on weekend news of the U.K. lockdown, the euro and franc turned lower on the session without an apparent catalyst. It could be argued that the generally positive PMI updates from Europe may have sparked some risk-on vibes on the session to steer traders away from safe have / lower-yielding currencies.
Tuesday:
Swiss consumer prices remained stable in October
Wednesday:
Big spike in volatility for both the euro and Swiss franc during the Asia trading session, highly likely driven by the U.S. election headlines from the U.S. as votes had started to be counted. Risk sentiment moved back and forth the flow as traders bounced back between fears of a long wait before we get the results, and false claims by Trump of winning the Presidential bid.
Thursday:
SECO Consumer Sentiment: -13 in Q3 2020 vs. -12 in Q2 2020
Another tumble for the franc during the London trading session as broad risk sentiment as flipped positive. This sentiment was likely on traders getting more confident that a Biden win could bring about a massive stimulus program and less regulatory risk in the U.S.
Friday:
The Swiss franc was able to bounce back during the Friday trading session, and with no major catalysts to change this week’s driving themes, and with volatility relatively low, it’s arguable that the week’s risk-on lean had run out of steam and/or suggested some profit taking ahead of the weekend.