CHF: Swiss Franc is getting weaker, amid external stability

At the Forex currency market on Friday Swiss Franc rate continues to move away from the historic highs, achieved this week, due to stabilization of the external environment.

Forex forecast: MACD indicator is in the negative area for the pair USD/CHF, making upward reversal and shaping a buy signal. Stochastic Oscillator has left the borders of the oversold zone yesterday and is growing in the neutral zone, giving a buy signal.

Forex recommendations: in case of breakdown at the level of 0.8440, the pair USD/CHF will go to 0.8455 and 0.8470.

If upward breakdown does not take place, the pair will consolidate close to the current levelsThe industrial sector index in June is going to be released on Friday (forecast- reduction to 57.8 points against the previous level of 59.2 points).GDP in Switzerland has slowed down 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 earlier showed that CPI in Switzerland remained unchanged on monthly basis (+0.4% y/y) in May against the forecast of decline by 0.1% m/m (+0.3% y/y).Representative of Swiss national Bank Mr. Brunetti noted today that growth rate of the national currency reflects economic situation in the country, although the Franc soared sharply due to demand in currency –shelter.

Swiss government does not influence on the exchange rate, he stressed, saying also that aggravation of the debt crisis in Europe threatens to bring more serious problems. As the data released this week showed consumption indicator UBS in Switzerland rose by 1.91 points in May against the growth of 1.57 points in April.

Statistics released earlier showed 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 earlier that unemployment rate in Switzerland fell to 2.9% in May against the level of 3.1% in April and the forecast of 3.0%. At  the meeting last week Swiss National Bank  left three- month Libor rate in the previous range of 0-0,75% with a tendency  to 0.25%. At the same time, the SNB said that GDP growth would amount to 2% this year.

Inflation in 2011 is predicted at around +0.9% (previously +0.8%), in 2012: +1.0% (previously 1.15), in 1013: +1.7% (previously +2.0%).It is worth noting that index of PMI SVME in Switzerland increased to 59.2 points against the forecast of 57.5 points. It proves once again that national economy has learnt to be effective even in circumstances where national currency is expensive.Meanwhile, demand in Franc as a safe currency is dropping, considering relative stability of the external background.

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