Higher Swiss jobless rate poses concern for SNB; overvalued franc deepens the cause

The jobless rate in Switzerland rose for the first time since May, during the month of August, shrugging expectations for an unchanged figure, raising concerns for the Swiss National Bank. Also, an overvalued franc is likely to dig deeper into the cause, posing further economic threats to the nation.

Swiss seasonally-adjusted unemployment increased to a three-month high of 3.4 percent for August from 3.3 percent in the previous month and compared with expectations that the rate would be unchanged.

In regard to this, the National Bank will remain concerned over the risks posed by an overvalued franc and will look to resist fresh appreciation. The franc edged weaker with EUR/CHF just above 1.0960 from 1.0955 as USD/CHF held above 0.9700.

This was the first increase since May and slightly higher than the 3.3 percent recorded for August 2015, which will maintain some concerns over cost-cutting within the economy, especially as GDP growth appeared to hold firm.

The unadjusted rate also increased to 3.2 percent from 3.1 percent, again slightly higher than the consensus forecast with an increase of 5,875 in the number of unemployed.

Meanwhile, the number of job seekers increased over the month and recorded an annual increase of 4.8 percent with youth unemployment edging higher over the month.