CHF: Growth of Swiss Franc suspended

At the Forex currency market growth of Swiss Franc, which has been very intensive yesterday has suspended on Wednesday morning. Franc was close to reaching its historical highs.

Forex forecast: MACD indicator is in the negative area for the pair USD/CHF, it is moving along the signal line not giving a clear signal. Stochastic Oscillator remains in the oversold zone and maintains a pair sell signal.

Forex recommendations: in case of breakdown at the level of 0.8960 the pair will go to 0.8945 and 0.8925. If breakdown does not take place the pair will consolidate close to the current levels.

The demand for the CHF was caused by the investors’ risk aversion due to the situation in Japan, where tremors do not stop, and also due to the general lack of interest of investors to the purchase.

The data on Swiss producer price index in March will be made public on Wednesday (previous value is +0.2% m/m); index of investors’ economic expectations ZEW in April will be released on Thursday. 

 In general the situation in Swiss economy has not changed this morning. It became known earlier that actual level of retail sales in Switzerland increased by 1.5% m/m in February against the fall by 2.4% m/m in January. However index of SVME-PMI fell to 59.3 points in March against the previous value of 63.5. According to the data released yesterday level of CPI in Switzerland rose by 0.6% m/m (+1,0% y/y) in March against the forecast of growth by 0.2% m/m. It is a ambiguous factor for Swiss economy as on the one hand the economy strengthens and on the other hand it suffers from significant inflationary pressure.

Three- month Libor rate remains unchanged, at the level of 0.25%.

Swiss National Bank has been taking active measures of verbal intervention against the Franc: following the last meeting representatives of the SNB said that strong currency is a burden for the economy and its overprice will trigger slowdown of the economy – largely due to the deceleration in exports volumes. A couple of weeks ago Swiss National Bank began to give indications of the possible intervention: the representative of the regulator Mr. Dantin stressed that the Bank is capable to ensure price stability even amid excess liquidity. In addition the politician said that the cost of intervention in the currency market will be determined by the informational pressure. 

 
 

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