Forex Analytics from LiteForex of 09.11.10: CHF: Swiss Franc shifted to growth despite technical signals

Swiss Franc rate is traded upward at the Forex currency market on Tuesday despite market general trend.

Forex forecast: MACD indicator is in the negative area for the pair USD/CHF, however it goes up, giving a pair buy signal. Stochastic Oscillator has not identified a signal today, being in the overbought zone.

Forex recommendations: if the current external background is maintained and the pair breaks down at the level of 0.9680; it will go to 0.9725 and 0.9770. Otherwise consolidation in the range will be observed.

It became known today that consumer confidence in Switzerland declined to the level of 7 points in October against the forecast of 17 points, as per SECO estimations.

Member of the board of the Swiss National Bank Mr. Dantin noted earlier that crisis in the developing countries has slowed down and almost finished and economies of Japan and the West are recovering however their recovery is very unstable. In his opinion estimation of the Swiss GDP for September is justified. Dantin noticed that strong Franc and slow pace of the recovery of the world finance system have a negative impact on Switzerland.

Franc nevertheless remains attractive currency for investments amid moderate recovery of the global   economy.

Swiss National Bank representative Mr. Jordan noted a week earlier that prolonged retention of the interest rates at the low level can cause additional risks for the economy. SNB intends to monitor carefully the dynamics of the real estate sector.  We would remind that interest rate in Switzerland has remained unchanged for 19 months already at the level of 0.25% per annum. According to the head of the Swiss National Bank, Mr. Hildebrand it is evident now that low levels of the interest rate can become a catalyst for the emergence of new bubbles in the real estate sector. “The longer the monetary policy remains of expansionary nature, the higher the risks of unwanted effects. Some signs of which have already been noticeable. It is especially evident in the real estate market where there is a great imbalances risk in case the rates are maintained at the current low level for a quite a long time”- he stressed last week. Hildebrand also noted that current level of the interest rate in Switzerland is still acceptable; he pointed however that current situation is ideal for the emergence of risks.

 

[More]