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Swiss economic outlook brightens as currency tensions ease
August 12, 2015 / 1:50 PM / 2 years ago

Swiss economic outlook brightens as currency tensions ease

ZURICH, Aug 12 (Reuters) - Expectations for Swiss GDP improved going into August, analysts told Credit Suisse in a survey after the Swiss franc began depreciating last month, easing pressure on the country’s export-driven economy.

The Swiss ZEW investor sentiment index rose by 11.3 points in August to 5.9 points, Credit Suisse, which issues the indicator in cooperation with the German ZEW economic research institute, said on Wednesday.

Analyst expectations for gross domestic product growth in Switzerland turned negative in July for the first time since February over heightened exchange rate uncertainty.

That chimed in with the gloomy views of consumers and employers in surveys collated in July and published last Thursday.

But the mood seems to have lightened as a depreciation of the franc has gathered momentum. The currency has dropped nearly 5 percent since mid-July and touched a six-month low against the euro on Tuesday.

The Swiss National Bank (SNB) made a rare public confirmation in late June that it had intervened to weaken the franc, which shot up in mid-January when the bank unexpectedly removed the currency’s cap against the euro.

This month almost 60 percent of analysts, surveyed between July 27 and Aug 10, said they believe the franc will stabilise against the euro, while only 12 percent expect the franc to rise in the next six months.

The net assessment of Switzerland’s present economic situation was also up from last month, with two analysts surveyed rating the situation as “good”, 24 as “normal” and eight as “bad”.

The franc’s surge after the cap was ditched, heightened by flight into safe-haven assets due to uncertainties over Greece’s financial future, has been a major concern given Switzerland’s reliance on its exporters.

At the end of July, Switzerland’s leading KOF economic barometer, pointing to the expected performance of the Swiss economy in about six months, rose to 99.8 points from a revised 89.8 points in June, underscoring the brighter outlook.

$1 = 0.9754 Swiss francs Reporting by Brenna Hughes Neghaiwi; editing by John Stonestreet

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