CHF: Swiss Franc is on the standstill this morning
Swiss Franc rate is on the standstill at the Forex currency market on Monday, trying to regain from the previous sales. However there is a high possibility at the moment that Swiss currency will continue to be weak.
Forex forecast: MACD indicator is in the negative area for the pair USD/CHF and is going upward giving a pair buy signal. Stochastic Oscillator has reached overbought zone, giving a similar signal.
Forex recommendations: in case of breakdown at the level of 0.8940 the pair USD/CHF will go to 0.8955 and 0.8970. If upward breakdown does not take place, the pair will consolidate close to the current levels.
Important data on Swiss economy will be released on Thursday, 19 May, it will be the index of investor economic expectations ZEW in May.
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 can be worse than predicted. “We intend to take any measures to achieve price stability” stressed monetary politician. According to him, downside risks to recovery are still preserved, although economy demonstrates steadier growth rate than previously expected. Statement made by Hildebrand that long term expansionary monetary policy constitutes a menace to some industrial sectors is worthy of being noted.
At present, the fall in the CHF rate reduces the hawkish spirits of the SNB to zero.
Earlier it was made public that unemployment rate in Switzerland fell to 3.1% in April against the previous level of 3.3%. It 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 by 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 export in Switzerland fell by 4.8% m/m in March against the level of +3.6% m/m in February.
Real level of retail sales in Switzerland increased by 1.5% m/m in February against the decline by 2.4% m/m in January; level of CPI in Switzerland rose by 0.6% m/m (+1,0% y/y) in March against the forecast of growth by 0.2% m/m. It is an ambiguous factor for Swiss economy as on the one hand the economy strengthens and on the other hand it suffers from significant inflationary pressure.
