US data released on Tuesday, showed that labor productivity outside the US agriculture sector dropped by 0.5% in Q2 against the forecast of the rise of 0.4%. The decline in the index has been recorded for the third consecutive quarter.
Despite positive data on the US labor market, released last Friday, weak data on the US GDP and labor productivity for Q 2 has reduced the likelihood of the interest rate increase in the USA in the next few months.
According to futures for interest rates, probability of the rate hike in September is 12%, against 15% a day earlier and 18% last Friday.
It is more likely that U.S. interest rate will be raised by 0.25% in December.
On the other hand, many Central Banks in the world prefer to adhere to monetary policy easing. Yesterday, the RBNZ lowered interest rate in New Zealand by 0.25%, to 2.0% and indicated that more monetary policy easing is possible in future.
According to Swiss statistics released earlier this week, consumer prices fell by 0.4% in July versus the previous month and by 0.2% compared to the same period last year. Retail sales in Switzerland declined by 3.9% on annual basis in July.
At the same time, the state of Swiss labour market is positive. Unemployment rate has been steadily at the level of 3.3% (according to the data presented on Tuesday), remaining one of the lowest in Europe and the world.
National Bank of Switzerland traditionally supports low exchange rate of Swiss franc believing that the current rate is too high. The SNB reserves the right to intervene into the currency market and sale the national currency in order to decrease demand for franc. The SNB has never notified about its plans either before or after the intervention. This fact obviously prevents aggressive purchase of franc.
It is likely that the USD will maintain strong positions in the foreign exchange market, including the pair USD/CHF before the end of August, despite low probability of the rate hike in the USA in September. In case of positive US macro-economic data long positions on the USD will increase by the end of the year.