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CHF: Swiss Franc continues to lose positions

Swiss Franc rate continues to descend from the local highs at the Forex currency market on Thursday morning due to the statements of the monetary authorities and under the pressure from external background.

Forex forecast: MACD indicator is in the negative area for the pair USD/CHF and continues to decline, giving a pair sell signal. Stochastic oscillator began to go up today, giving a pair sell signal, being in the neutral zone.

Forex recommendations: off the market.

Feasible event scenario at Forex: in case of breakdown at the level of 0.9440 the pair will go to 0.9475 and 0.9500. If upward breakdown will not take place the pair will continue to consolidate close to the current levels.

Thus, external background is exacerbated by the aggravation in the situation in Egypt where political instability cannot be settled amicably and which affects risk appetite at Forex.

In addition, yesterday Swiss monetary authorities gave to understand that expensive Franc bears danger. Thus, chief economist of the government Aimo Brunetti noted on Wednesday that ongoing growth of CHF will have a negative impact on Swiss economy, affecting adversely the growth of economic system.

At the same time, according to him there is no actual evidence of slowdown in Swiss economy so far.

Note that SECO, the Department of Economic Policy in Switzerland believes that this year GDP growth will drop to 1.5% while in 2010 it amounted to 2.7%. The department will release a new forecast on 17 March.

Meanwhile, situation in Swiss economy is far from being optimistic. Swiss data released earlier was negative: (Retail sales in December: -0.4% y/y against +1.8% for the previous period; PMI in the manufacturing sector in January: 60.5 against 61.2 for the previous period).

In addition, indicators of last week showed ongoing pressure on Swiss economy: leading indicator according to the Research Institute KOF fell to the level of 2.10 against the level of 2.11 in December, which became the fifth consecutive fact of reduction of the indicator. However, the data was still above than the forecast of economists (2.05)

Therefore, pace of economic recovery in the country has obviously slowed down and the guilt for it is laid on Swiss Franc too.

 
 

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