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At the Forex currency market Swiss Franc rate is traded upward on Tuesday, keeping on yesterday’s trend.

Forex forecast: MACD indicator is in the negative area for the pair USD/CHF, however it is moving along the signal line, not giving a any signals. Stochastic Oscillator goes down in the neutral zone, giving a sell signal.

Forex recommendations: in case of breakdown at the level of 0.8400, the pair USD/CHF will go to 0.8380 and 0.8360. If downward breakdown does not take place, the pair will consolidate close to the current levels.

As it became known today, money supply M3 in Switzerland reduced to 5.6% y/y in May against the level of 6.9% y/y in April.

 

Statistics released this week showed that producer prices and prices for imports decreased by 0.2% (-0.4% y/y) in May against the forecast of growth by 0.1% m/m. It became known earlier that unemployment rate in Switzerland fell to 2.9% in May against the level of 3.1% in April and the forecast of 3.0%. It is positive data for Swiss economy because strong Franc does not prevent cohesive economic growth. As it became known earlier level of trade balance in Switzerland rose by 1.52 billion in April against the growth of 1.0 billion in March. Index of leading indicators KOF in Switzerland rose to 2.30 points in May against the forecast of growth by 2.22 points.

At  the meeting of the Swiss National Bank last week, three month rate Libor was left in the previous range of 0-0,75% with a tendency  to 0.25%.
At the same time the SNB said that GDP growth would amount to 2% this year. Inflation in 2011 is predicted at around +0.9% (previously +0.8%), in 2012: +1.0% (previously 1.15), in 1013: +1.7% (previously +2.0%).

Julius Baer Group believes that it is not clear yet whether Swiss economy requires the increase in the   interest rate or not: “any rise will have an impact on the economy as a whole for a year”. However it is quite possible that local economy and its recovery process are strong enough to cope with the interest rate rise to 1%-1.5%.

GDP in Switzerland has slowed down growth rate in QI this year, increasing by 0.3% on quarterly basis (+2.4% y/y) against the rise of 0.8% last quarter and the forecast of growth of 0.6 %. In addition, index of PMI SVME in Switzerland increased to 59.2 points against the forecast of 57.5 points. It proves once again that national economy has learnt to be effective even in circumstances where national currency is expensive. The data released earlier showed that CPI in Switzerland remained unchanged on monthly basis (+0.4% y/y) in May against the forecast of decline by 0.1% m/m (+0.3% y/y).