Swiss Franc Falls Against European Currencies on Flat Inflation Data

The Swiss franc fell against other European currencies on Tuesday, after the Swiss economy posted flat inflation data for May. According to the

, the CPI fell to 0.0% in May from 0.1% in April. Most analysts were expecting the CPI to fall 0.1%, however. Avoiding deflationary pressures should be good news for the Swiss franc. The Swiss currency lost some value against other European currencies, however. At around 8:30 am GMT, the British pound added 0.3% to its value to trade around 1.3693 against the franc. At the same time, the euro rose 0.39% to 1.2214. The franc made some gains against the U.S. dollar, however, as the greenback fell 0.1% to 0.8338. The Swiss currency has skyrocketed since the beginning of the financial crisis. The value of the franc has been partly supported by the relatively healthy Swiss economy, especially compared to that of the Eurozone periphery. The Swiss economy is exports-driven, however, and strong currency is putting its exporter under pressure. As a result, in spite of higher than expected inflation data, which should push the value of the franc higher, other considerations, like the negative effects of strong franc on Swiss exporters, seemed to push the value of the franc downwards. Traders who believe the health of the Swiss economy and inability of the recovery in the U.S. and Eurozone to find a solid foothold will provide additional steam for the franc will be interested in the CurrencyShares Swiss Franc Trust ETF

. Other traders might think that the value of the franc has gone too high and is making Swiss exporters uncompetitive will be more interested in the ETFS Short Swiss Franc Long US Dollar ETC ETF (

).