Daily Economic Commentary: Switzerland

[PipDiddy]

The Swissy managed to extend its winning streak against the euro for a third day with a 61-pip win as EUR/CHF closed at 1.3320. Boo yeah! It also erased the loss it sustained from the dollar on Monday, with USD/CHF ending the day 76 pips lower at 0.9569. Oh Swissy, you’re so fine you blow my mind!

We didn’t hear economic hollers from Switzerland yesterday so keep tabs on its PPI figures for September later at 7:15 am GMT. Analysts are expecting input prices to have increased by 0.1% during the month, at the same rate as they did in August . Take note that a higher-than-expected figure will probably be bullish for the Swissy as this would imply increasing inflationary pressures in the country.

Good luck and happy trading!

[PipDiddy]

Yodel-eh-eeh-uh-oh! The Swissy seemed to have lost its mojo during yesterday’s trading as both USD/CHF and EUR/CHF closed the day higher at 0.9590 and 1.3385, respectively. Doing the math, we see that it gave up 21 pips to the dollar and 70 pips to the euro.

It might have been the disappointing inflation report that ticked off traders from the Swissy. Yesterday we saw that producer and import prices declined by 0.1% in September, erasing the increase it posted in August and coming short of the 0.1% growth forecast. Yikes! The decline probably fueled worries that deflation is still a problem in Switzerland.

Ah, it looks like we’re in for a snoozefest from here on out. Make sure you keep tabs on what’s up with the Swissy’s counterparts. Remember that the currency is considered as a ‘safe haven’ currency by investors and usually hustles when risk aversion kicks in. Good luck and happy trading!

[PipDiddy]

I’m gonna start callin’ the Swissy “The Mailman”… because he always delivers! Haha! It delivered another strong performance against the Greenback yesterday, forcing USD/CHF to a new record low. Before it eventually closed at .9529, the pair had plunged from its opening price of .9591 and bottomed out at .9464.

Once again, Greenback weakness helped pull USD/CHF down the charts. Switzerland didn’t even need to publish any reports to beef up its currency!

Coming up… Nothing! No reports are due for release from Switzerland again today. So in the meantime, head on over to the U.S. as it’s scheduled to publish a few hard-hitters later in the day. Be on the lookout for worse-than-expected U.S. results because Swissy bulls love to feed off them!

[PipDiddy]

The absence of economic reports left the franc at the mercy of market sentiment, during Friday’s trading. Its scorecard was as mixed as a bag of M&Ms as it sustained a 54-pip loss against the dollar when USD/CHF closed the week at 0.9584, and snatched a 10-pip win against the euro when EUR/CHF chilled at the 1.3400 psychological handle to end the day.

Ah, it looks like we’re also in for a snoozefest this week. We only have the trade balance report for September and ZEW’s economic survey for October due on Thursday. So until then, I guess the best thing to do is to gauge the market sentiment before trading the Swissy. Good luck and may the pips be with ya!

[PipDiddy]

Ah, it seems like the Swissy got its mojo back as it posted gains against its major counterparts in yesterday’s trading. It was up by as much as 91 pips against the euro when EUR/CHF bottomed at 1.3306, before the pair ended the day at 1.3375 with a 22-pip gain for the Swissy. Against the dollar, it was able to snatch 17 pips as USD/CHF closed at 0.9560.

Word on the street is that the franc advanced thanks to remarks about the euro zone’s fragile economy. Hmmm, you may want to keep yourself updated on the ECB’s bond purchasing program and continued speculation about QE2 in the U.S., as doom-and-gloom talks may jump start risk aversion and reel in the Swissy with a handful of pips. Good luck!

[PipDiddy]

Like other non-dollar majors, the Swiss franc got sliced up like a block of cheese in yesterday’s trading session. Okay that was a corny one, but it’s actually a pretty accurate description of what happened! Thanks to renewed interest in the dollar, USD/CHF climbed up the charts to close above the .9700 handle, giving it a 145 pip gain for the day.

You can pretty much chalk this one up to a major dollar move. Thanks to news from China as well as some traders cutting back on their short dollar positions, we saw the dollar gain across the board.

Take note though, that the franc did gain versus the euro. This may indicate that part of the move was due to a run of risk aversion. Remember, the franc seems to have regained its place as a safe haven currency over the past few months. If traders decide to cut back on their risky positions, we may just see the franc remain steady versus higher yielding currencies.

[PipDiddy]

After their short two-day rest, the Swissy bulls are at it again! Thanks to more talks of further quantitative easing from the Fed, the Greenback fell across the board, much to the delight of the Swissy bulls. After briefly rallying to .9750 on Tuesday, USD/CHF fell back to .9617 yesterday.

No important data was released from Switzerland yesterday, so the Swissy's rally was likely the result of a weak Greenback more than anything else. In fact, if you look at the charts of other major currencies, you'd see that most of them, if not all, posted huge gains over the Greenback.

Today, two important reports will print.

The first one is Switzerland's trade balance. Set to come out at 6:15 am GMT, it is expected to show a 1.2 billion CHF surplus for September, up from the 0.58 billion CHF surplus seen the previous month. The expected rise in the trade balance seems to indicate that the Swissy's strength isn't weighing down on the demand for the its exports. Hmm, another reason to buy the Swissy?

The second one, which is will be released at 9:00 am GMT, is the ZEW economic expectations survey. 9:00 am GMT. The previous recent report printed a -5.1 reading, which means that investors and analysts were pessimistic about the state of Switzerland's economy for the next six months. If the survey later manages to hit positive territory, it could help the Swissy clock in further gains over the Greenback.

[PipDiddy]

The Swissy didn’t get any sweet lovin’ from the bulls yesterday. It lost against the dollar by 49 pips when USD/CHF closed higher at .9677 and the euro by 45 pips as EUR/CHF ended the day at 1.3476.

So why did traders dump the Swissy? Hmmm, it might have been because of the trade balance report for September. Yeah, I know that the 1.69 billion CHF trade surplus, which beat the 1.2 billion CHF consensus, should have been bullish for the currency. But looking deeper, we see that the only reason why exports outpaced imports was because demand at home and abroad both fell during the month.

Aside from that, we also saw that the SNB is diversifying its currency reserves by exchanging its euros for dollars. The SNB Bulletin for the third quarter revealed that at the end of September, the bank’s euro holdings amounted to only 90.9 billion EUR, down from 120.6 billion EUR during the second quarter. On the other hand, their dollars increased to 54.6 billion USD from 44.9 billion USD.

Some are taking this as an implication that the central bank is now paying closer attention to USD/CHF than EUR/CHF. You may want to take this into consideration when you trade the Swissy because with USD/CHF hovering over its all-time low and the BOJ signaling for help to weaken the yen (and in so doing strengthen the dollar), the SNB may just go back to its old intervention habits.

[PipDiddy]

Yodel-eeh-uh-oh! The Swissy closed the week scoring losses against its major counterparts with USD/CHF 120 pips higher at .9797 and EUR/CHF up at 1.3646 with 173 pips.

The absence of economic hollers and comments from the SNB has left a few naysayers scratching their heads trying to figure out what caused the avalanche on the Swissy’s pips. Some are saying that perhaps the move was related to mergers and acquisitions activity.

You may want to keep an ear out for updates on the Swissy’s sell-off on Friday as this could affect its fate on the charts this week. Speaking of which, our economic calendar points out that we only have a couple of reports on tap for the currency.

The first one being the UBS Consumption Indicator for September which is due on Wednesday at 6:00 am GMT and the KOF leading indicator for October which is scheduled on Friday at 9:30 am GMT. The latter is seen to indicate that economic activity in Switzerland may be slowing with the forecast down at 2.18 from its previous reading which was at 2.21.

Happy trading everyone!

[PipDiddy]

Let’s give a major fist bump to the franc! Despite the lack of reports in the land of Swiss watches yesterday, the franc managed to gain against its major counterparts on euro and dollar weakness. EUR/CHF ended the day 59 pips lower at 1.3560, while USD/CHF leveled off to a 33-pip drop after falling to an intraday low of .9664.

Switzerland will witness more action today when the UBS consumption indicator is released at 6:00 am GMT. Will the data keep its consecutive rise by printing higher than its 1.95 figure in August?