CHF: Swiss Franc acts as safe currency again and is growing

At the Forex currency market Swiss Franc rate continues to grow on Tuesday; after the new information about high level of radiation in Japan investors begun to buy safe currencies and Franc is among of them.

Forex forecast: MACD indicator is in the negative area for the pair USD/CHF and continues to rise, however volumes in the indicator are declining. Stochastic Oscillator dropped in the oversold zone today maintaining a pair sell signal.

Forex recommendations: in case of breakdown at the level of 0.9030 the pair will go to 0.9000 and 0.8980.

The situation in Swiss economy has not changed fundamentally 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 actively taking 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 the 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.

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

 
 

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