CHF: Growth of Swiss Franc has been suspended

At the Forex currency market growth of Swiss Franc rate has suspended on Monday.

Forex forecast: MACD indicator for the pair USD/CHF has broken through the signal line from bottom to the top and came into the positive area, maintaining a weak buy signal. Stochastic Oscillator goes down in the neutral zone and is giving a sell signal, approaching oversold zone.

Forex recommendations: in case of breakdown at the level of 0.7870, the pair USD/CHF will go to 0.7860 and 0.7850. If downward breakdown does not take place, the pair will consolidate at the current levels.

In general, conditions in the market are favourable for the growth of the Franc, because global market outlook is rather gloomy. In addition, authorities of Switzerland supported SNB’s plans of non-intervention into the exchange trading, which can also be beneficial to CHF. 

We would remind that demand for Franc went up when government announced a new market aid program; although the amount of CHF870 million was lower than expected. In addition, authorities indicated that they are not going to set a target rate for the Franc. According to the Minister of Economic Affairs of Switzerland, the country will have to put up with expensive Franc for some time and only SNB is able to influence on the Franc in medium-term.

Agency Reuters said earlier that according to the information from some sources Swiss authorities are going to adopt a new program to support economy which will be the second one. Program can include measures to support innovations and also a package of measures to support infrastructure sector. It is expected that the package will be presented at the winter session of the Parliament.

Statistics released earlier showed that consumption indicator UBS fell to 1.29 points in July against the level of 1.52 points in June. The indicator has been sliding down not for the first month, showing negative tendencies in the economy.

According to the data released earlier, unemployment rate in Switzerland remained at the level of 3.0% in July. Statistics released earlier showed that the level of retail sales in Switzerland increased by 7.4% in June against the revised level of -3.9% in May. In addition, index of PMI SVME rose to 53.5 points in July against the forecast of 52.5 points.

It became known earlier that producer prices and imports prices in Switzerland declined by 0.7% m/m (-0.5% y/y) in July against the fall of 0.6% m/m in June. In addition, consumer confidence index in Switzerland fell to -17 points in Q3 against the forecast of -5 points.