Swiss Economic Expectations Improve in May

        By Neil MacLucas
        ZURICH--Swiss economic expectations rose for a third month in May, suggesting that prospects for improved growth in the eurozone economies will help the Alpine country weather the strength of the franc.
        A survey by the ZEW Institute and Credit Suisse Group, released Wednesday, showed the overall headline index of investor and analyst expectations rose to minus 0.1 points this month, from minus 23.2 points in April. The May reading is the highest since August last year.
        The improvement comes after the index fell by a record amount in February in the aftermath of the Swiss central bank's repealing of its cap for the franc. This sent the currency soaring against the euro, kindling fears exporters could be priced out of their key market.
        Banks, as well as the government and the Swiss National Bank, all slashed their forecasts for economic growth to take account of the erosion in the competitiveness of Swiss companies.
        The Swiss government is due to update its growth forecast June 16 after slashing it in March to 0.9% from 2.1%, while the central bank will review its 1% projection on June 18.
        Still, a negative number in the index indicates that more participants expect the economic outlook to worsen than those who expect it to improve.
        "The present state of Switzerland's economy was rated as 'normal' in the May assessment, while economic prospects for the eurozone remain very good," said Credit Suisse.
        Financial analysts are more optimistic on the growth outlook for the eurozone economies in the wake of the European Central Bank's bond-buying program and lower energy prices.
        The strong franc has been a major concern for analysts, but the latest index shows around 42% of those surveyed expect the Swiss currency to depreciate against the euro, while the rest expect it to remain steady over the next six months, it said.
        "This drift in expectations away from an appreciating franc may have something to do with recent indications that the Swiss National Bank has been buying foreign currencies," it said.
        The franc was last at 1.0422 a euro.
        The latest ZEW data contrasts with the equivalent ZEW survey in Germany, the most important single market for Swiss exports, which hit a five-month low in May, data showed Tuesday.
        Write to Neil MacLucas at neil.maclucas@wsj.com
        (END) Dow Jones Newswires

        May 20, 2015 05:00 ET (09:00 GMT)

#FX
#Forex
#SaleForex
#SwissEconomic
#ExpectationsImprove
#InMay