CHF: Swiss Franc is growing moderately today

Swiss Franc rate is growing moderately at the Forex currency market on Monday morning within the narrow range, amid quiet external environment. 

Forex forecast: MACD indicator for the pair USD/CHF is in the positive area, it started to go down and is ready to shape a sell signal. Stochastic Oscillator goes down in the neutral zone, moving away from the oversold zone and is giving a sell signal.

Forex recommendations: in case of breakdown at the level of 0.9210, the pair USD/CHF will go to 0.9200 ? 0.9190. If downward breakdown does not take place, the pair will be close to the current levels.

The economic situation in Switzerland has not changed considerably this morning.

Currently the Franc is in the narrow range, maintained by the Bank. Note that SNB gave indications in September that could have been interpreted as follows: regulator’s power to maintain the Franc is fading away. We would remind that there is increasing talk among investors in the market that SNB can review its position on the key levels and peg exchange rate of the pair EUR/CHF to around 1.25.

It became known earlier that unemployment rate in Switzerland remained at the level of 2.8% in September as expected. Employment sector is stable so far; however repercussion of the expensive national currency is possible. Index of PMI SVME fell to 48.2 points in September against the level of 51.7 points in August. In addition retail sales in Switzerland fell by 1.9% y/y in August against  +1.9% y/y a month earlier.

According to Mr Jordan, a representative of the SNB, it is necessary to increase the reserves of the SNB in order to prevent the growth of the Franc. SNB will take all measures to protect the target level of SNB. According to him, if you just sit back, CHF will rise above the parity level in pairing with the Euro. At the same time the monetary politician did not comment on the probability of increasing the target level.

As per the annual report of SNB, in the next 6 month economy of the country will come to a standstill due to the impact of the expensive Franc and sharp decline in foreign demand. Thus, GDP in Switzerland will amount to 1.5%-2.0% this year and main growth will attribute to the results of the first part of the year. SNB noted in the comments that if stringent monetary measures had not been taken the economy would have slipped to a recession. SNB expects that inflation will be at the level of 0.4% in 2011 and at the level of 0.3% next year.