CHF: Swiss Franc is in quiescent state in Friday

Swiss Franc rate almost stands still at the Forex currency market on Friday, the currency came to the end of the week with some growth despite all efforts of the Swiss national Bank.

Forex forecast: MACD indicator for the pair USD/CHF is in the positive area, it goes down and is shaping a sell signal. Stochastic Oscillator is in the oversold zone, it is moving along the signal line and is giving a similar signal.

Forex recommendations: in case of breakdown at the level of 0.8970, the pair USD/CHF will go to 0.8940 and 0.8920. If downward breakdown does not take place, the pair will remain close to the current levels.

It became known yesterday that producer prices and import prices in Switzerland declined by 0.1% m/m (-2.0% y/y) in September. Franc barely reacted to statistics. 

In other respects Swiss economy remains unchanged. Apparently, positions of the Swiss National Bank are not too strong. Step by step Franc is successfully gaining strength. Earlier this week, the pair USD/CHF went down, following the pair EUR/CHF, which had been actively sold out by one of the Swiss Banks and British Clearing Bank, as dealers explained.

It is worth noting that SNB gave indications in September that could be interpreted as follows: regulator’s power to maintain the Franc is fading away. We would remind that according to the rumors which grow louder among investors in the market, SNB can revise its stand on the key levels and peg exchange rate of the pair EUR/CHF to around 1.25. According to Mr Jordan, a representative of the SNB, it is necessary to increase the reserves of the SNB in order to prevent growth of the Franc. SNB will take all measures to protect the target level of SNB. He also said that if they let the grass grow under the feet, CHF will rise above the parity level in pairing with the Euro. At the same time, monetary politician did not comment chances of increasing the target level.

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. It is not known precisely yet what volumes does SNB have at the trades now. According to the annual report of the SNB, over 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.