Swiss Trade Surplus At Four Month Low

Swiss Trade Balance (Swiss francs) (AUG)

Actual: 0.64B
Expected: 0.93B
Previous: 1.51B

The long-standing Swiss trade surplus was trimmed down for a second month through August as a strong franc cut into demand for exports. Last month, the nation’s positive balance was cut from SFr 1.51 billion to SFr 0.64 billion. Forecasts had held out for a SFr 0.93 billion balance. On a historical basis, August’s surplus was the smallest in four months, but is on average with the sub-one billion readings that have been reported every two to three months for the past year. Looking for data from the Federal Customs Office immediately after the release, there was only a one step breakdown. According to the government body’s statistics, exports fell 17.1 percent to SFf 14.5 billion francs. At the same time, imports dropped 13.3 percent to SFr 13.9 billion. The dip in domestic spending on foreign goods agrees with the cooling in adjusted retail sales through the same period. At the same time, the plunge in exports likely finds its source in the franc’s rally to a two year high against the US dollar and a five month high against the euro; not to mention recent data that has suggested demand from Switzerland’s largest export markets may cool with growth.
In the minutes after the trade release, the Swiss franc saw a marked yet delayed rally. USDCHF dropped 25 points to cross the closely watched 1.18 level.