Swiss franc falls against euro on Brexit relief

Amsterdam

THE Swiss franc fell to its lowest in nearly seven months against the euro on Monday, as the Brexit trade deal remained in focus, while the dollar dipped after US President Donald Trump signed a Covid-19 aid bill, averting a government shutdown.

The Swiss franc fell 0.3 per cent to 1.08860 against the euro, its lowest since June 8. It was unchanged against the US dollar at 88.835 US cents at 5.03pm on Monday, Singapore time.

The euro was up 0.1 per cent at U$1.22370, near the 2½-year high of US$1.2273 touched this month.

In the United States, Mr Trump signed into law a US$2.3 trillion pandemic aid and spending package, averting a partial federal government shutdown that would have started on Tuesday.

The US dollar dipped 0.3 per cent against a basket of currencies to 90.031, its lowest in a week.

Meanwhile, Britain's sterling added 0.1 per cent against the US dollar to US$1.3551, continuing to keep in sight the US$1.3625 mark it hit earlier this month for the first time since May 2018.

It neared that level on Thursday, when Britain and the European Union (EU) announced the trade deal.

The pound was down 0.5 per cent against the euro at 90.280 pence.

While the deal came as a relief to investors, the bare-bones nature of the pact leaves Britain far more detached from the EU, analysts say, suggesting any subsequent gains will be modest and the discount that has dogged UK assets since 2016 will not vanish soon. Brussels has made no decision yet on whether to grant Britain access to the bloc's financial market.

Mitsuo Imaizumi, chief FX strategist at Daiwa Securities in Tokyo, expects the pound and euro to decline against the US dollar, reaching US$1.30 and US$1.15 respectively by the end of the summer.

The Australian dollar, a trade sensitive currency, inched up to 76.110 US cents, toward the 2½-year high of 76.390 reached this month.

The yuan crept up after China's central bank lifted its official guidance level to the highest in 30 months, to as high as 6.5280 against the US dollar in the onshore market, but was last unchanged at 6.5408. It was last down 0.3 per cent in the offshore market at 6.5311.

The yen rose slightly against the US dollar, up 0.1 per cent at 103.455.

Policymakers at Japan's central bank were divided on how far they should go in examining yield curve control, a summary of opinions voiced at the December rate review showed on Monday. REUTERS