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Swiss Franc rate is traded slightly upward at the Forex currency market on Friday; however, the pair has not left its range, because regulator keeps watch.

Forex forecast: MACD indicator for the pair USD/CHF is growing in the positive area, maintaining a buy signal. Stochastic Oscillator has left overbought zone and is going down, giving a sell signal.

Forex recommendations: off the market.

Feasible event scenario at Forex: in case of breakdown at the level of 0.8800, the pair USD/CHF will go to 0.8820 and 0.8850. If upward breakdown does not take place, the pair will consolidate at the current levels.

At the meeting, which was held earlier, Swiss National decided to leave the three-month Libor rate at the zero level, as expected. In the follow up comments SNB noted that it would continue to protec the target exchange rate of EUR/CHF at 1.20. In addition Regulator stated that Swiss GDP will grow by 1.5-2% in 2011 (previously it was the level of 2%); inflation will not exceed the level of 0.4% this year. CPI will be at the level of -0.3% next year and will be +0.5% in 2013. CNB also confirmed its intention to buy foreign currency in unlimited volume in order to prevent growth of the Franc.

It also became known yesterday that volume of industrial production in Switzerland rose by 2.3% y/y in Q2 against the forecast of +2.7% y/y.

It became known earlier that producer prices and imports prices in Switzerland declined by 0.7% m/m (-0.5% y/y) in July against the fall of 0.6% m/m in June. In addition, consumer confidence index in Switzerland fell to -17 points in Q3 against the forecast of -5 points. Statistics released earlier showed that indicator of consumption UBS fell to 1.29 points in July against the level of 1.52 points in June. The indicator has been sliding down not for the first month, showing negative tendencies in the economy; therefore, tough position of the SNB will be most welcome.

The data released earlier showed that unemployment rate in Switzerland remained at the level of 3.0% in July. Statistics released earlier showed that the level of retail sales in Switzerland increased by 7.4% in June against the revised level of -3.9% in May. In addition, index of PMI SVME rose to 53.5 points in July against the forecast of 52.5 points. The data released yesterday showed that unemployment rate in Switzerland remained at the level of 2.8% in August, the same as in July.  It is good that “long arms” of the Franc has not reached this important sector. Statistics which was made public before this decision showed that Switzerland slides down to deflation: CPI in August fell by 0.3% m/m against the forecast of decline by 0.2% m/m.

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