The Swiss franc is rising against many of its currency rivals on Thursday after bullish data suggest the economy may be on the rebound in the aftermath of the coronavirus pandemic. The chief concern, however, is that the appreciating franc could spark intervention in foreign exchange markets by the Swiss National Bank (SNB). The central bank has been candid in its depreciation objectives.

According to the Swiss Federal Statistics Office (SFSO), the consumer price index (CPI) came in at 0% for the second consecutive month in June. Over the last 12 months, it has been primarily deflation as prices only rose twice in February and March by 0.1%.

Retail sales climbed 30.7% in May, up from the 13.6% decline in April. This lifts the annualized retail sales rate to 6.6% last month, up from -18.8% in the previous month.

Switzerland’s leading KOF economic barometer surged to 59.4 last month, up from a downwardly revised 49.6 in May – anything above 50 indicates expansion. Although this is way below the long-term average of 99.4, the various indicators highlight a rising business sentiment across various sectors, including manufacturing, construction, and services.

The manufacturing purchasing managers’ index (PMI) disappointed as it fell from 42.1 in May to 41.9 in June – anything below 50 indicates a contraction. Economists had anticipated a reading of 48.3. There was a faster decline in employment, and more companies have curtailed or suspended capital spending. But there was an increase in output, purchasing volumes, and buying prices.

Because of the franc’s gains against many of its currency rivals in recent months, and uncertainty in the broader global financial markets, it is believed that the SNB will inevitably intervene again. The SNB has stated that it is ready to accelerate its measures to contain the franc’s ascent, which is not a positive trend for an export-oriented economy.

Central bank chief Thomas Jordan said last month:

In light of the highly valued Swiss franc it remains willing to intervene more strongly in the foreign exchange market.

The USD/CHF currency pair dipped 0.01% to 0.9458, from an opening of 0.9459, at 16:26 GMT on Thursday. The EUR/CHF fell 0.22% to 1.0619, from an opening of 1.0642.