CHF: Swiss Franc continues to grow consistently

At the Forec currency market on Tuesday Swiss Franc rate continues to grow for the second consecutive day.

Forex forevast: MACD indicator is in the negative area for the pair USD/CHF and continues to go down, confirming a pair sell signal. Stochastic oscillator is giving a similar signal, being in the neutral zone.

Forex recommendations: if bearish sentiments intensify for the pair traders’ targets will be the levels of 0.9620 and 0.9570.

The CHF rose to a new high in pairing with the USD yesterday, and the pair USD/CHF looks more stable.
According to the assessment of KOF, Swiss Institute of research of economic cycles, Swiss Franc will retain the status of safe asset and a status of a refuge for the whole period of tension in Europe.

In addition, KOF has revised its forecast for GDP growth upward in 2011; is it projected that Swiss economy will increase by 1.9% in 2011 against the previous forecast of 1.8%. In 1012 national economy is expected to rise by 2%.
This year, GDP growth in Switzerland can amount to 2.7%.

We would remind that at the meeting which was hold last week, Swiss National Bank decided to maintain three months rate Libor in the previous target range of 0-0.75. This decision of the Bank was expected by the market. Index was revised in March 2009 the last time when it was reduced by 0.25%.

Speaking of the prospects of currency intervention it can be noted that it is possible that SNB will carry out intervention on a unilateral basis next year if the Franc will continue to grow rapidly.

Due to the high rate of the CHB the regulator cannot yet return to its standard monetary policy – it is expected that SNB will increase interest rate by mid- 2011. In addition growth of the rate will be insignificant because CNF is constantly under pressure from a growing trend, which is caused by European problems and demand for currency as a protective asset.
 

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