2016-10-28 12:43:17

Swiss index of leading indicators KOF has grown by 3.1 point, up to 104.7 in October against the forecast of 101.3 and 101.8 in September, which is the highest level since January 2014.

KOF indicator shows economic activity in future, predicting economic stability in Switzerland.

The rise in the index has a positive effect on the franc.

The pair USD/CHF hardly reacted on the positive index and continues to trade in the narrow range at the level of 0.9930.

It is expected that today's data on the American GDP for Q3 at 15:30 GMT+ will have a greater impact on the pair and the USD. The forecast for the US GDP is the rise by 2.5% on the annual basis against +1.4% in Q2. If the forecast proves to be correct, probability of the rate hike in the USA will increase.

According to CME Group, probability of monetary policy tightening in December is at the level of 78.5% against 60% at the beginning of the month.

The rise in the rate in November is not expected. The two-day meeting of the Fed is scheduled for November 1-2. It is unlikely that the Fed will take any measures ahead of the presidential elections in the United States on 8 November.

In September Swiss National Bank left deposit rate at the level of -0.75%.

3-month LIBOR rate also remained unchanged (-0.25% to -1.25%).

The comments of the SNB said that the negative interest rate and probability of intervention into the currency market by the Bank are aimed at reducing pressure on the Swiss franc. SNB traditionally said that the frank is overbought. The SNB never announces about the intervention, and this fact prevents excessive rise in the franc.

Further movement in the pair will depend on the decisions and comments of the US Fed.USD/CHF: Swiss KOF indicator has grown in October.  Fundamental analysis for 28/10/2016