The Swiss franc is trading flat against its G10 currency counterparts toward the end of the trading week. As the economy suffered its worst economic performance on record in the second quarter, the franc could not find a direction in either direction. Will the franc face a correction, or will it continue its strengthening momentum?

According to the Swiss government, the gross domestic product (GDP) fell 8.2% during the April-to-June period. The sharpest decline on record, although it did come in better than the market forecast of 8.6%. Several factors contributed to the steep contraction: private consumption (-8.6%), equipment and software investment (-11.7%), construction (-4%), and imports and exports slumped in Q2.

The overall economy took a severe hit as the government took action to limit the spread of the coronavirus pandemic.

Now that the worst is over, are the Swiss optimistic about the economy? Not quite. The Economic Sentiment Index came in at 45.6 in August, up from 42.4 in July – anything below 50 indicates pessimism. On Friday, the KOF Leading Indicators index will also be released to offer insight into the general economy.

Earlier this week, non-farm payrolls clocked in at 5.095 million in the three months ending in June, which is down from the 5.132 million seen in the first quarter.

Next week, retail sales, manufacturing purchasing managers’ index (PMI), and inflation will come out.

Although Switzerland witnessed economic devastation this year, its European neighbors experienced an even bigger drop in GDP. Germany’s GDP contracted 9.7% in the second quarter, while France’s GDP fell 14%. Spain reported a collapse of nearly 20%.

Some analysts fear that Switzerland might resort to additional restrictions following a steady increase in confirmed coronavirus cases since the end of July. So far, Switzerland has more than 41,000 infections, with a death toll of about 1,700.

The franc has been one of the best-performing currencies in foreign exchange markets this year, even with confidence in the broader economy.

The USD/CHF currency pair was unchanged at 0.9085 at 18:59 GMT on Thursday. The EUR/CHF dipped 0.06% to 1.0742, from an opening of 1.0747.