CHF: Swiss Franc is in the range again

Trades have changed slightly for Swiss Franc at the Forex currency market today: the currency stuck in the range again; this time it is the range of 0.8764-0.8880.

Forex forecast: MACD indicator is in the negative area for the pair USD/CHF and is increasing, giving a pair buy signal; while volumes are below average. Stochastic Oscillator is coming out of the oversold zone and is starting upward reversal, giving a pair buy signal. 

Forex recommendations: in case of breakdown at the level of 0.88250, the pair USD/CHF will go to 0.8850 and 0.8880. If upward breakdown does not take place, the pair will consolidate close to the current levels.

It became known yesterday that index of investors’ economic expectations ZEW in May fell by 20.3 points in May, to the level of -11.5 points against the previous level of 8.8 points. Due to such background, a number of those who expected the increase of the interest rate in the next quarter have dropped sharply.

Meanwhile, economists do not assess Swiss economic situation as negative, on the contrary, it is described as “good” (majority -68.6% of respondents think so).

The share of those, who expect the rise in inflation in the near future, has fallen to 51.4% (-25.1%).

Inflation has slowed down in Switzerland which became another negative factor for the Franc, pushing the currency downward. It became known last week that the index rose by 0.1% m/m (+0.3% y/y) which is below the forecast of 0.6% y/y.

It was made public earlier that unemployment rate in Switzerland fell to 3.1% in April against the previous level of 3.3%, which is a positive indication for the economy. The data released earlier showed that, real retail sales in Switzerland decreased by 0.2% in March against the growth of 1.8% in February. In addition index SVME – PMI in Switzerland fell to 58.4 points in April against the previous level of 59.3 points. In addition statistics released earlier showed that consumption indicator UBS in Switzerland rose to 1.660 points in March against the revised level of 1.453 points in February; while volume of exports in Switzerland fell by 4.8% m/m in March against the level of +3.6% m/m in February.

The head of the National Bank of Switzerland, Mr. Hildebrand noted that strong and expensive Franc undermines exports and disrupts tourism industry; therefore negative impact of the CHF could be worse than predicted. “We intend to take any measures to achieve price stability” stressed the monetary politician. According to him, downside risks to recovery are still preserved, although economy demonstrates steadier growth rate than previously expected. It was worth noting Hildebrand’s statement that expansionary monetary policy constitutes a menace to a number of industrial sectors in the long term.
Swiss National Bank is going to discuss monetary policy issues on 16 June.

 
 

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