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At the Forex currency market Swiss Franc rate almost stands still on Wednesday, remaining in the narrow trading range; which is not surprising when less than three working days are left before the New Year.

Forex forecast: MACD indicator for the pair USD/CHF is in the positive area and is going down slowly, giving a weak sell signal. Stochastic Oscillator started to decline in the neutral zone and is giving a sell signal.

Forex recommendations: in case of breakdown at the level of 0.9330, the pair USD/CHF will go to 0.9320 and 0.9300. However, there is a high chance that the pair will consolidate at the current levels.

Macro-economic situation in the country remains stable.

Swiss National Bank noted earlier that the regulator is prepared to take additional measures if situation at Forex deteriorates. According to SNB, strong Franc creates extra problems for the economy and the issue of negative interest rates and control over the capital movement is being thoroughly scrutinized in the Bank.

GDP in Switzerland will amount to 1.5%-2.0% this year; main growth will be attributed to the results of the first part of the year. SNB noted in the comments that if stringent monetary measures had not been taken the economy would have slipped to a recession. SNB expects that inflation will be at the level of 0.4% in 2011 and at the level of 0.3% next year.

It became known earlier that trade balance in Switzerland rose by 3.0 billion francs in November against the forecast of +2.00 billion francs and previous value of +2.15 billion francs. Index is favourable, however it is based on the efforts of the local regulator to curb the rate of the Franc.

According to observers from Wells Fargo, economic indexes in Switzerland demonstrated slowdown all the year round and there are many indications showing that the weakness will continue for the next six months. According to them, domestic demand is also getting lower which is a negative sign. As for the rate, it is most likely that SNB will adhere to the zero level due to the soft inflation.

Three-month Libor rate was left in the range of 0-0.25%, closer to zero; the Bank did not change pegging level of Franc to Euro, maintaining the actual level of 1.20.  In the follow up comments the head of SNB Mr. Hildebrand stressed that the regulator will continue to maintain the target rate of CHF, with the help of purchases of foreign currency in unlimited quantities and additional package of measures if situation requires. SNB is ready to maintain high level of liquidity, as inflation growth is not expected. In general, economy of the country depends a lot on the European crisis. Apparently, SNB has adopted attitude of an onlooker, keeping in place existing management tools, being pretty confident that they always have time to start intervention.

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