Forex Market: EUR/CHF trades little changed, Swiss economic sentiment drops for a third month

The euro traded slightly changed against the Swiss franc, after the ZEW research institute reported economic sentiment in Switzerland dropped in March, while risk appetite seemed to have increased, as Western sanctions on Russia have so far been limited.

EUR/CHF reached a session high at 1.2183 at 9:55 GMT, also the pairs highest point since March 11th, after which consolidation followed at 1.2170, gaining 0.03% for the day. Support was likely to be received at March 18th low, 1.2150, while resistance was to be encountered at March 11th high, 1.2192.

According to data released by the ZEW Institute (Zentrum für Europäische Wirtschaftsforschung), the gauge of economic sentiment for Switzerland dropped for a third consecutive month in March to reach a reading of 19.0, while in February it came in at 28.7. The gauge has slipped over 17 points so far during the first quarter.

Positive values indicate that the number of analysts, who expressed optimism regarding nations economic development during the next six months, exceeded the number of those who were pessimistic in their expectations.

Geopolitical tension in Crimea probably caused an adverse influence on estimates.

At the same time, sanctions against Russia, imposed by the US and the EU, have so far been limited to visa restrictions and asset freezes against officials. Yesterday, Russia’s President Vladimir Putin officially signed an accord to start a procedure of the annexation of Ukraine’s breakaway Crimean region.

In Kremlin Putin said that Russian Federation had no intention to harm Ukraine, while he saw the referendum in the Black Sea peninsula as “open, fair”. Putin also said that he had no ambitions in other areas of Russia’s western neighbor. He asserted the right to defend Russian speakers in the eastern part of Ukraine.

“The West hasn’t introduced any significant sanctions against Russia so far, the market is calm,” Sergey Vakhrameev, an analyst in Moscow at AnkorInvest LLC, said in an interview with Bloomberg today.

In the Euro zone, the labor cost index was reported to have increased 1.4% during the final quarter of 2013, compared to the same period a year ago.

In addition, output in regions construction sector expanded 8.8% in January 2014 compared to January 2013. In monthly terms, output rose 1.5% during the first month of the year.