Watch maker Swatch says surging Swiss currency weighed down earnings in year's 1st half

MarketsAssociated Press

Prominent Swiss watch maker Swatch says the country's surging currency and below-zero interest rates pushed its earnings down sharply in the first half of this year.

Swatch Group AG on Thursday reported net income of 548 million francs ($578 million) for the January-June period, 19.4 percent less than a year earlier. At the same time, sales rose 2.2 percent to 4.19 billion francs.

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Swatch pointed to the impact of the "massively overvalued" currency but said it expects a strong second-half performance "despite the Swiss franc dilemma."

The Swiss National Bank shocked markets in January when it dropped its cap on the franc's value against the euro, causing the currency to spike and raising fears about the competitiveness of Swiss exports.