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At the Forex currency market Swiss Franc rate suspended its growth on Tuesday and the pair USD/CHF is aimed at slight correction after rather significant decline. Meanwhile, SNB has not commented last rise of the national currency.

Forex forecast: MACD indicator for the pair USD/CHF is in the positive area and is going down, giving a sell signal. Stochastic Oscillator has come into the oversold zone, and is giving a similar signal.

Forex recommendations: in case of breakdown at the level of 0.8810, the pair USD/CHF will go to 0.8800 and 0.8780. If downward breakdown does not take place, the pair will remain close to the current levels.

 It became known today that consumption indicator UBS in Switzerland rose to 0.84 points in September against revised level of 0.80 points in August.

Given that the data reflects the figures of the months when SNB has fixed the rate of the Franc, the index looks very much positive. According to the annual report of the SNB, over the next 6 month economy of the country will come to a standstill due to the impact of the expensive Franc and sharp decline in foreign demand. Thus, GDP in Switzerland will amount to 1.5%-2.0% this year and main growth will attribute 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. Trade balance surplus in Switzerland amounted to 1850 billion SHF in September.

According to the data released last week, producer prices and import prices in Switzerland declined by 0.1% m/m (-2.0% y/y) in September; Franc hardly reacted to statistics. Statistics released earlier showed that unemployment rate in Switzerland remained at the level of 2.8% in September as expected. Employment sector is stable so far; however repercussion of the expensive national currency is possible. Index of PMI SVME fell to 48.2 points in September against the level of 51.7 points in August. In addition retail sales in Switzerland fell by 1.9% y/y in August against   +1.9% y/y a month earlier.

We would remind that kick-start for consolidation was triggered last week when the pair USD/CHF went down, following EUR/CHF, which had been actively sold out by one of the Swiss Banks and British Clearing Bank, as dealers explained. It is worth noting that SNB gave indications in September that could have been interpreted as follows: regulator’s power to support the Franc is fading away. Recall that according to the rumors which grow louder among investors in the market, SNB can revise its stand on the key levels and peg exchange rate of the pair EUR/CHF to around 1.25. Therefore, reserves of the CNB seem to disappear before our eyes along with determination of the Bank to curb the Franc. Earlier trade union of Switzerland urged authorities and the Bank to toughen the fight against expensive Franc suggesting to increase minimum allowable exchange rate of the pair EUR/CHF in order to avoid recession. Representative of the Trade Union believe this measure will also support employment sector.

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