Swiss CPI Falls 0.5 Percent in May

Swiss consumer prices fell at a slightly slower pace on an annual basis in May, data showed on Thursday, but still-weak price pressure continued to support the case for the Swiss National Bank to keep a lid on the franc to ward off deflation.

Prices rose 0.1 percent month-on-month, in line with average analyst forecasts and up from zero in April. Prices fell 0.5 percent on the year, just beating forecasts for a drop of 0.6 percent.

The Federal Statistics Office said while rents, food, clothes and organised travel became more expensive, prices for oil products continued to fall.

“There are still no signs of inflationary dangers, meaning the SNB can stick to its policy. It shows the introduction of the exchange rate floor was justified,” said ZKB economist David Marmet.

Seeking to prevent deflation and a recession, the SNB capped the franc at 1.20 per euro in September 2011 after investors looking for a safe haven from the euro zone crisis had pushed the Swiss currency from one record high to another.

via Reuters

This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza