2012-02-23 09:56:00

At the Forex currency market Swiss Franc rate demonstrated interest to local highs again on Thursday.

Forex forecast: MACD indicator for the pair USD/CHF is in the negative area and is moving along the signal line again not giving a clear signal. Stochastic Oscillator has gone to the oversold zone and is giving a sell signal.

Forex recommendations: in case of breakdown at 0.9080, the pair USD/CHF will go to 0.9070 and 0.9050.

Actually, new surge of strengthening in Franc took place with out intervene of the authorities. Minister of Economic Affairs of the country added more fuel to the fire yesterday saying that it would be logical to shift pegging of rate between Franc and Euro to 1.40 euro ( now it is 1.20). In his opinion, in this case EIR/CHF will be closer to purchasing power parity. In addition, the politician noted that SNB needs a new leader as soon as possible.

We would remind that SNB does not have a leader yet after resignation of Mr. Hildebrand in January.

Monetary politician Mr. Jordan said earlier that SNB is firmly determined to maintain the level of 1.20 in the pair Euro/Franc. The Bank is prepared to adopt additional measures if economic situation requires. He also confirmed that economic growth rate slowed down this year in Switzerland, although there is no risk of the rise in inflation. He believes that Franc is still too strong and reduction in its price is urgently required.

It became known yesterday that trade balance in Switzerland amounted to -1.553 billion francs in January against the forecast of -2.50 billion francs. The report showed that exports decreased by 3.4% last month against preliminary estimate of growth of 6.1%; imports increased by 3.6% (preliminary forecast: +7.6% m/m).The data is not too positive, since levels of exports are in the red again.

According to the previous data, inflation in Switzerland fell by 0.4% m/m (_0.8% y/y) in January against expectations of decline of 0.2% m/m. This is the fourth consecutive drop in the index and at the same time it is maximal fall since October 2009. Expensive Yens eriously hampers the progress of economy: at the beginning of the year import of consumer goods fell by 1.8% m/m (-3.2% y/y), however the goods of Swiss production rose in price by 0.1% m/m. Therefore, inflation threat is becoming more tangible in Switzerland. It became known earlier that index of economic expectations ZEW rose to -21.2 points in February against the level of -50.1points in January. Most likely it is the reflection of monetary efforts of SNB. Unemployment rate in the country amounted to 3.4% in January against the forecast of 3.5% and previous value of 3.3%. This is the highest level of the index since last spring indicating unfavourable situation in the national economy.

CHF: Swiss Franc is at the local highs again