CHF: Swiss Franc has been weakening for the third consecutive session

At the Forex currency marketSwiss Franc rate preserves downward trend on Monday morning after reaching newhistoric highs last week.

Forex forecast: MACD indicatoris in the negative area for the pair USD/CHF, continues to reverse upward,giving a pair buy signal, while volumes are increasing. Stochastic Oscillatorremains close to the overbought zone, giving a similar signal.

Forex recommendations: in caseof breakdown at the level of 0.8500, the pair USD/CHF will go to 0.8540 and0.8560. If upward breakdown does not take place, the pair will consolidateclose to the current levels.

The situation in Swiss economyremains almost unchanged this morning.

Last week, at the meeting ofthe Swiss National Bank the three month rate Libor was left in the previousrange of 0-0,75% with a tendency to 0.25%. At the same time the SNB has notedthat GDP growth will amount to 2% this year, inflation in 2011 is predicted ataround +0.9% (previously +0.8%), in 2012: +1.0% (previously 1.15), in 1013:+1.7% (previously +2.0%).

Julius Baer Group believes thatit is not clear yet whether Swiss economy requires the increase in the interest rate or not: “any rise will have an impact on the economy as awhole for a year”. However it is quite possible that local economy andits recovery process are strong enough to cope with the interest rate rise to1%-1.5%.

GDP in Switzerland has sloweddown growth rate in QI this year, increasing by 0.3% on quarterly basis (+2.4%y/y) against the rise of 0.8% last quarter and the forecast of growth of 0.6 %.The data released last week showed that CPI in Switzerland remained unchangedon monthly basis (+0.4% y/y) in May against the forecast of decline by 0.1% m/m(+0.3% y/y).

Statistics released this weekshowed that producer prices and prices for imports decreased by 0.2% (-0.4%y/y) in May against the forecast of growth by 0.1% m/m. It became known earlierthat unemployment rate in Switzerland fell to 2.9% in May against the level of3.1% in April and the forecast of 3.0%. It is positive data for Swiss economybecause strong Franc does not prevent cohesive economic growth. As it becameknown earlier level of trade balance in Switzerland rose by 1.52 billion inApril against the growth of 1.0 billion in March. Index of leading indicatorsKOF in Switzerland rose to 2.30 points in May against the forecast of growth by2.22 points.

It is worth noting that indexof PMI SVME in Switzerland increased to 59.2 points against the forecast of57.5 points. It proves once again that national economy has learnt to beeffective even in circumstances where national currency is expensive.