The EUR/CHF pair gained yesterday after the cheerful data from Europe and the successful bond auction inFrance, where the euro gained strength after German unemployment retreated to 6.8% from 6.9%. However, Switzerland PMI also shocked markets after the manufacturing sector expanded beyond expectations to 50.7 from 44.8.
The optimism seen in the market yesterday, supported the euro to gain more than the Swiss franc, which is considered a low yielding currency and a safe haven, where the positivity seen yesterday led investors to hold high yielding currencies such as the euro after the appetite for risk improved.
Our eyes will be focused today on the performance of the services sectors in Europe and on inflation, where better than expected data fromEuropecould support the euro to extend the gains against the Swiss franc on expectations that the euro-area region will not fall into another depression, yet it will pass through a “mild recession”.
Germany will start the day at 08:55 GMT with the final PMI Services index for December, which could have lingered at 52.7.
The euro zone will join the session at 09:00 GMT with the PMI Composite and Services final indexes for December, where both indexes are expected unchanged at 47.9 and 48.3 respectively.
At 10:00 GMT the euro-area region will provide markets with the annual CPI estimate of December, where inflation is expected lower at 2.8%, compared with the prior 3.0%.
Originally posted here
