The euro and Swiss franc dominate most of the majors this week as risk aversion sentiment seems to be the main driver of price action.
Traders turned bitter on risk assets on concerns over rising geopolitical and pandemic risks. Risk catalysts for both currencies covered in the Swiss franc recap below.
European Headlines and Economic data
Italian industrial production fell by 28.4% m/m in March 2020
ECB Heads for more stimulus even as courts spar over limits
Germany infection rate rises as lockdown eases
Merkel believes German court’s ECB ruling is ‘solvable’: sources
ECB Rehn say German court trying to interfere with ECB independence
ECB, facing legal attack, not the villain of Europeanism – ECB Kazimir
Northern Ireland sets lockdown exit plan resembling Ireland’s, but no timetable
Italy approves long-delayed economic stimulus package in coronavirus fight
ECB’s de Guindos says euro zone economy has already bottomed out
German inflation rate +0.9% y/y in April
German wholesale prices -1.4% m/m in April
ECB Economic bulletin: Ready to support the euro area during the coronavirus crisis.
German finance minister calls for fund to restart Europe’s economy
German GDP in 1st quarter of 2020 down 2.2% on the previous quarter
German Producer prices in April 2020: -1.9% on April 2019
The Swiss Franc
Swiss Headlines and Economic data
Swiss National Bank battling enormous pressure on safe-haven franc: Jordan
Increased global risk aversion sentiment on rising US-China tensions and fears of a new infection wave was likely the catalyst for the euro and franc’s early week strength.
A bit of up-and-down price action for both currencies on the session, once again on news headlines and risk sentiment flows.
More fears of a second coronavirus wave sparked risk-off sentiment during the Asia session, but hopes of an economic recovery as countries end lockdown restrictions turn traders to positive sentiment during the London trading session.
Risk sentiment swings back to negative to push EUR & CHF higher during the US session on the dire pandemic outlook and more headlines of rising US-China tensions.
Risk-on sentiment during London session on lockdown easing had the franc falling back during, but it was a quick flip to risk-off sentiment during Fed Chair Powell’s warning of extended economic weakness that had both currencies popping higher against the risk currencies during the U.S. session.
Risk-off sentiment picked up during the Friday session to extend the franc and euro’s gains against the risk currencies.
This shift was likely on a combination of weak economic updates from China, Germany, and the U.S., as well as on negative vibes on U.S.-China relations. (Trump administration moves to cut Huawei off from global chip suppliers)
TABLE OF CONTENTS (click the following links and read again).