CHF: Swiss Franc moves away from historic highs

At the Forex currency market Swiss Franc rate moves away from historic highs on Friday as the demand for the safe currency has slackened after the U.S. decision on the budget for the second half of the fiscal year  with the decrease in government spending by more than $38 billion.

Forex forecast: MACD indicator for the pair USD/CHF is in the negative area, maintaining a pair sell signal. Stochastic Oscillator tends to come out of the oversold zone today, starting a pair buy signal.

Forex recommendations: if the level of 0.8950 is broken down, the pair will go to 0.8965 and 0.8980. 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 increased to 8.8 points in April against the fall by 13.5 points in February. It was a positive sign for Switzerland which confirmed the continuation of the national economy recovery even despite strong Franc. The data of this week demonstrated also that producer price index and prices for import increased by 0.4% y/y in March which agreed with the forecasts.

In general situation in Swiss economy has remained almost unchanged this morning. It became known earlier that actual level of retail sales in Switzerland rose by 1.5% m/m in February against the fall by 2.4% m/m in January. However index of SVME-PMI fell to 59.3 points in March against the previous value of 63.5. According to the data released yesterday 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 a ambiguous factor for Swiss economy as on the one hand the economy strengthens and on the other hand it suffers from significant inflationary pressure.

Three- month Libor rate remains unchanged, at the level of 0.25%.

Representative of the regulator Mr. Dantin stressed that the Bank is capable to ensure price stability even amid excess liquidity. In addition the politician said that the cost of intervention in the currency market will be determined by the informational pressure.

The SNB has highlighted the problems not once: following the last meeting, the regulator said that strong currency is a burden for the economy and its overprice will trigger slowdown in economic growth – largely due to the deceleration in export volumes.  

 

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