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At the Forex currency market Swiss Franc rate continues to weaken on Thursday- market is regaining from yesterday’s statement of the Swiss national Bank.

Forex forecast: MACD indicator is in the negative area for the pair USD/CHF, and is going down, tending towards sideways and maintaining a sell signal. Stochastic Oscillator is coming out of the oversold zone and has started to shape a buy signal.

Forex recommendations: in case of breakdown at the level of 0.7800, the pair USD/CHF will go to 0.7820 and 0.7850. If upward breakdown does not take place, the pair will consolidate at the current levels.

Thus, yesterday Swiss national Bank had restricted three- month Libor rate to 0-0.25% (it had amounted to 0-0.75% previously). They also stated that increasing rate of the Franc is a negative factor for the national economy; therefore Libor rate will tend to zero and the SNB is going to infuse liquidity into the market in the nearest future to “chill out” the Franc.

The threat to economic progress and price stability are two main arguments which the SNB has in favour of intervention.

Swiss monetary authorities have mentioned earlier that national economy is still in good shape despite strengthening of the national currency. As the same time, first signs of cooling in the export sector could be observed and if these symptoms continue to develop, it will have a negative impact on the economy as a whole. According to the representative of Swiss National Bank Mr. Jordan, Switzerland went through the crisis easier than other countries largely, due to its monetary policy and if the country will return to deflation, the CNB knows how to fight it off. Jordan is concerned, however about recent dynamics of the EUR/CHF, saying that risks will increase when Italy joins the list of the EU problematic countries.

According to statistics released earlier, level of retail sales in Switzerland rose by 7.4% y/y in June against the revised level of -3.9% y/y in May. In addition, index of PMI SVME increased to 53.5 points in July versus the forecast of 52.5 points.

Current data shows that the data released previously was seasonal and does not indicate recession of the economy. Index of leading indicators KOF in Switzerland fell to 2.04 in July, while the forecast had been 2.11.  The data released earlier showed that trade balance in Switzerland totaled +1.74 billion francs in June against preliminary revised level of +3.25 billion francs.

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