CHF: Swiss Franc tends to consolidate
At the Forex currency market on Thursday morning Swiss Franc rate continues to demonstrate efforts to consolidate.
Forex forecast: MACD indicator is in the negative area for the pair USD/CHF and is growing, giving a pair buy signal; while volumes are below average. Stochastic Oscillator has reached oversold zone, giving a pair sell signal.
Forex recommendations: in case of breakdown at the level of0.8770, the pair USD/CHF will go to 0.8750and? 0.8735. If downward breakdown does not take place, the pair will consolidate close to the current levels.
Important statistics on Swiss economy will be made public today: index of investors’ economic expectations ZEW in May.
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 by 0.6% y/y.
Swiss National Bank is going to discuss monetary policy issues on 16 June and it is possible that the rates will be increased for the first time in four years.
It was made public Earlier 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.
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. The statement of Hildebrand that expansionary monetary policy constitute menace to a number of industrial sectors in the long term prospects is worthy of being noted.
The fall in the CHF rate has reduced the hawkish spirits of the SNB to zero.
