CHF: Swiss Franc remains weak

At the Forex currency market Swiss Franc rate continues to decline.

Forex forecast: MACD indicator for the pair USD/CHF has broken through the signal line from top to bottom and is traded in the negative area; however it tends to go up and is ready to shape a buy signal. Stochastic Oscillator remains in the overbought zone, and is giving a buy signal.

Forex recommendations: in case of breakdown at the level of 0.9145, the pair USD/CHF will go to 0.9150 and 0.9170.

Macro-economic situation in Switzerland remains almost unchanged this morning.

According to the head of Swiss national Bank Mr. Hildebrand, current crisis has a devastating effect and price stability which has been achieved through monetary policy is not a guarantor of financial stability. Therefore, the main goal of SNB is to ensure price stability.

Representative of Swiss National Bank Mr. Dantin said earlier that strong Franc continues to exert pressure on the economy of the country and, and SNB is prepared to take urgent measures in the event of deflation risks. He reiterated that economy of Switzerland is extremely dependent on exports.

Surplus of trade balance amounted to 1850 billion SHF in September. It became known earlier that consumption indicator UBS in Switzerland rose to 0.84 points in September against the revised level of 0.80 points in August.  Taking into account that the data reflects the figures of the months when SNB has fixed the rate of the Franc, the index looks very much positive. Producer prices and import prices in Switzerland declined by 0.1% m/m (-2.0% y/y) in September; Franc hardly reacted to statistics.

Unemployment rate in Switzerland rose to 2.9% which was expected rise from 2.8%, however traders were upset. According to statistics released earlier monetary reserves in Switzerland decreased to 242.7 billion francs in October against 282.4 billion in September.

According to the quarterly report of SNB, economy of the country will move in the sideways in the second half of the year, largely, 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 is attributed 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.