CHF: Swiss Franc tends to keep on growing

At the Forex currency market Swiss Franc rate started to grow again on Monday, after slight correction at the end of last week.

Forex forecast: MACD indicator is in the negative area for the pair USD/CHF and continues to descend, giving a pair sell signal. Stochastic oscillator still remains in the oversold zone, however it tends to come out of it upward.

Forex recommendations: off the market.

Feasible event scenario at Forex: in case of breakdown at the level of 0.9330 the pair will go to 0.9370 and 0.9430. If the level of 0.9270 is exceeded, bears’ target will be the level of 0.9250.

The data on GDP for QIV 2010 in Switzerland will be released on Tuesday this week, according to the forecast, the index will grow by 0.5% on quarterly basis against preliminary level of +0.70%, the growth by 2.8% is expected on annual basis.

In addition, on 1 March the index of industrial sector (PMI) for February will become known which, according to preliminary estimates will grow to the level of 60.9 points versus the previous value of 60.5 points.

On Thursday, 3 March, the data on retail sales for January is going to be published.

It became known last week that employment rate in Switzerland declined to the level of 4.085 billion in QIV against expectations of growth to 4.086 billion; however Franc ignored this information. The data released earlier showed that indicator of consumption UBS in Switzerland fell to the level of 1.676 points (-0.15 points) in January amid decreasing sales in retail sector due to the low demand for new cars. However the indicator still remains above the key level of 1.5, which ensures favorable prospects.

In addition, import prices in Switzerland increased by 9.8% y/y in January; export rose by 15.5% y/y.

It is a factor of trade balance (index rose to the level of 1.96 billion euro in January against the growth to 1.26 billion euro earlier) that helps the CHF to be considered a stable currency, since the country does not require external borrowings.

According to the head of the Bank, Philipp Hildebrand, currency intervention carried out by the National Bank of Switzerland last year has reached its objective. Monetary politician believes that Switzerland has achieved price stability and got rid of the signs of inflation. We would remind that SNB had been buying the Euro since March 2009 until the middle of 2010 to limit the growth of Franc. Hildebrand is confident that Switzerland is in more advantageous position now compared with Eurozone, where inflation amounts about 2%. Price stability, according to the monetary politician, does not give rise to complaints. 

 

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