CHF: Swiss Franc gathers strength

At the Forex currency market Swiss Franc rate is traded slightly upward on Tuesday, continuing yesterday’s trend.

Forex forecast: MACD indicator is in the negative area for the pair USD/CHF and is growing, giving a pair buy signal. Stochastic Oscillator has come out of the overbought zone, going down and is giving a pair sell signal.

Forex recommendations: in case of breakdown at the level of 0.8840 the pair USD/CHF will go to 0.8825 and 0.8800. If upward breakdown does not take place, the pair will consolidate close to the current levels.

Inflation has slowed down in Switzerland which became another negative factor for the Franc which is pushing the currency downward. It became known last week that the index rose by 0.1% m/m (+0.3% y/y) which is below the forecast by 0.6% y/y.

Swiss National Bank is going to discuss monetary policy issues on 16 June and it is possible that the rates will be increased for the first time in four years.

The head of the National Bank of Switzerland, Mr. Hildebrand noted that strong and expensive Franc undermines exports and disrupts tourism industry; therefore negative impact of the CHF can be worse than predicted. “We intend to take any measures to achieve price stability” stressed monetary politician. According to him, downside risks to recovery are still preserved, although economy demonstrates steadier growth rate than previously expected.

At present, the fall in the CHF rate reduces the hawkish spirits of the SNB to zero.

Earlier it was made public that unemployment rate in Switzerland fell to 3.1% in April against the previous level of 3.3%. It is a positive indication for the economy. The data released earlier showed, that real retail sales in Switzerland decreased by 0.2% in March against the growth by 1.8% in February. In addition index SVME – PMI in Switzerland fell to 58.4 points in April against the previous level of 59.3 points. In addition statistics released earlier showed that consumption indicator UBS in Switzerland rose to 1.660 points in March against the revised level of 1.453 points in February; while volume of export in Switzerland fell by 4.8% m/m in March against the level of +3.6% m/m in February.

Important data on Swiss economy will be released on Thursday, 19 May; it will be the index of investor economic expectations ZEW in May.

 

 

 

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