Euro Swiss notes 2012 2
Swiss franc strengthens vs dollar but down vs pound on data Reuters

The Swiss franc strengthened against the dollar on Wednesday snapping a two-day trend of losses on higher than expected consumer price inflation data.

The USD/CHF slipped to 0.9624 from the previous close of 0.9660 after having rallied more than 1.5% over Monday and Tuesday.

Data showed that Swiss CPI inflation rebounded to 0.3% month on month in March after recording 0.3% deflation in February and beating market consensus of 0.2% of inflation.

Year-on-year, the deflation rate worsened to 0.9% from 0.8% in the previous month, but it was better than the market consensus of a 1% slide in the price index.

The Swiss currency, however, weakened against the euro and pound thanks to the continued impact of the hawkish signals from the services sector data released on Tuesday. The construction and retail PMI numbers on Wednesday added to the Euro positives too.

The Markit services PMI for Germany rose to 55.4 in March from 55.3 in February, while analysts had been expecting a repeat of the same. The same for UK has jumped to 58.9 from 56.7 beating consensus estimate of 57.0.

The German construction PMI came in at 53.3 for March, which is a four-month high, from 53.1 in February, data showed on Wednesday.

"The highlight of March's data, however, is the return of new order growth, following a three-year period of contraction. The increase in new business was in fact the strongest in the survey's history, with companies benefiting from strong demand and improving market conditions," said Oliver Kolodseike, economist at Markit.

GBP/CHF rose to 1.4331 from 1.4303 at Tuesday's close. EUR/CHF jumped to 1.0465 from 1.0448 before easing back to 1.0455.