CHF: Swiss Franc continues to rebound

Swiss Franc rate continues to lower at the Forex currency market on Thursday, falling back due to the pressure from USD

Forex forecast: MACD indicator is in the negative area for the pair USD/CHF, however it goes up, giving grounds for a pair buy signal. Stochastic Oscillator still remains in the overbought zone.

Forex recommendations: if bullish sentiments will be preserved at the market, buyers’ targets will be the levels of 0.9695 and 0.9730.

Swiss National Bank reported yesterday that it will not accept Irish government bonds as collateral for repo transactions any more. Although this decision was made at the end of December-  its announcement caused collapse of all high-yielding currencies and strengthen the USD position as a safe harbor.

It became known today that consumer price index in Switzerland remained unchanged on monthly basis in December, demonstrating the rise by 0.5% on annual basis; while analytics had expected the growth by 0.2% m/m and +0.3% y/y.

According to KOF estimates (Swiss institute of research on economic cycles) Swiss Franc will retain the status of a protective asset and a refuge as long as the period of tension will be maintained in Europe.

KOF has also 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%.

Interest rate in Switzerland (Libor) is currently in the target level of 0-0.75%; the next meeting of the Swiss National Bank is scheduled for 17 March.  Subsequent meeting of 2011 will be held on 16 June, 15 September, 15 December.

We would remind that business activity index in Swiss industries fell to 59.6 points n December against the forecast of 61 points and previous value of 61.8 points. According to the data released at the end of December, KOF indicator in Switzerland fell to the level of 2.10 in December against its previous value of 2.13; however it still remains at a high level, supporting the belief that country’s economy continues to recover.

 

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