CHF: Swiss Franc is getting weaker at the beginning of the week

At the Forex currency market Swiss Franc rate continues to become weaker on Monday morning and is moving further away from historic highs, reached last week. 

Forex forecast: MACD indicator is in the negative area for the pair USD/CHF and is moving along the signal line, not giving a clear signal.  Stochastic Oscillator is increasing in the neutral zone, giving a pair buyl signal.

Forex recommendations: in case of breakdown at the level of 0.8450 the pair USD/CHF will go to 0.8465. If upward breakdown does not take place, the pair will consolidate close to the current levels.

In general economic situation in Switzerland remains unchanged.

Julius Baer Group believes that it 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 a whole for a year”. However it is quite possible that local economy and its recovery process are strong enough to cope with the interest rate rise to 1%-1.5%.

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%. It is positive data for Swiss economy because strong Franc does not prevent cohesive economic growth. In addition, 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. As it was also made public earlier, level of trade balance in Switzerland rose by 1.52 billion in April against the rise of 1.0 billion in March. In addition, exports in Switzerland increased by 7.9% in April against the fall by 3.1% in March. Index of leading indicators KOF in Switzerland rose to 2.30 points in May against the forecast of growth by 2.22 points.

Swiss GDP 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 %.

According to estimates of the SNB, the main activator for economic growth in Switzerland is still national consumer demand, triggered by the rise in the demand for houses and health care expenditure, as well as high level of export. The data released last week 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).