Daily Economic Commentary: Switzerland

[PipDiddy]

Just when everyone thought that the franc would sweep last week's trading with a 5-day winning streak against the dollar, USD/CHF got rejected at support just above .9300. By the end of Friday's trading, the pair was 22 pips above its opening price at .9344. Bummer!

The currency probably ran out of fuel due to the lack of any economic reports from Switzerland. With that said, I wonder if it will continue to give up pips to the dollar today given that our forex calendar still doesn't have anything on tap for the franc. Hmmm, it might be a better idea to gauge market sentiment to help you decide whether to go long or short on the franc in today's trading.

[PipDiddy]

It looked like all was lost for the Swissy as it began the week with a poor start. USD/CHF gapped up 44 pips over the weekend as it opened at .9388. However, as the day wore on, the Swissy grew stronger, and it eventually forced USD/CHF to close at .9265, 113 pips down from its open price. What a comeback, eh?

Thanks to yesterday's broad dollar sell-off, the Swissy was able to post some nice gains on the charts. However, against the euro, it merely held steady and practically ended unchanged.

From the looks of it, EUR/CHF will probably continue trading steadily today, considering it has traded within a tight range over the past few days. Of course, there's a chance we'll see bigger moves today in the event the euro zone makes another big announcement.

However, assuming everything stays mellow, USD/CHF may remain the pair to watch since it has shown extended moves over the past week or so. Remember, momentum is on the Swissy's side, homies!

[PipDiddy]

It was just one of those choppy days for the Swissy as USD/CHF spiked up and down between the .9250 and .9300 levels. EUR/CHF, on the other hand, traded higher and closed 14 pips up from its 1.2077 open price.

The lack of hard-hitting data from both Switzerland and the U.S. was probably the reason for USD/CHF's choppy price action yesterday, as risk appetite also toned down. As for EUR/CHF, stronger than expected PMI figures from the euro zone account for most of EUR/CHF's gains.

There aren't any economic reports on Switzerland's schedule today, but USD/CHF could be in for an exciting day as the FOMC is set to make its monetary policy statement at 5:30 pm GMT. Make sure you drop by my U.S. economic commentary to see how that could turn out!

[PipDiddy]

Taking advantage of the scrilla’s weakness, the Swiss franc trampled its way to a major victory yesterday, as USD/CHF dropped 59 pips from its opening price to close at .9212.

With no data coming out for the rest of the week, we can probably expect Swissy trading to take its cue from shifts in risk sentiment. Who knows – we might just see a midweek reversal!

[PipDiddy]

Every pip counts! The Swiss franc was able to pull off wins against both the dollar and the euro yesterday, and though its gains weren't exactly impressive, seeing it rally against its two major counterparts isn't something that happens everyday. It gained 5 pips against the dollar and stole 17 pips away from the euro.

It's been a while since we last got a taste of Swiss data, so I'm sure y'all will be pleased to see the KOF economic barometer come out at 10:30 am GMT.

Forecasts have the index slipping from 0.01 to -0.06 for the month of January. Should results come in worse than expected, the franc could very well lose its recent gains and some!

[PipDiddy]

Just like its European counterparts, the Swiss franc exerted its dominance over the greenback in last Friday’s action. USD/CHF closed 81 pips lower to finish the week at .9125. This marked the third consecutive week that USD/CHF has finished lower.

Only major piece of data coming out from Switzerland this week is yearly retail sales figures on Wednesday. Still, I don’t expect this to have that much of an effect on Swissy trading.

Instead, I’d focus on the ongoing European debt crisis and how the market reacts to any new developments. Interestingly, despite the lack of progress from European officials, the franc has persistently pushed higher versus the dollar. Sometimes it just doesn’t make any sense but hey, that’s just how the market rolls!

[PipDiddy]

The Swissy's scorecard was as mixed as a glass of margarita in yesterday's trading. While it was able to end the day with an 11-pip win against the euro, it gave up 62 pips to the dollar when USD/CHF closed the day at .9181.

Without any economic data released from Switzerland, it seems that it was market sentiment that dictated the currency's price action yesterday. But don't worry! Today we have December's UBS Consumption indicator to sink our teeth into at 7:00 am GMT.

If you're planning to go long on the Swissy, keep your fingers crossed for a figure higher than the 0.81 reading we saw for November. This would indicate that economic conditions improved in the country so be on your toes!

[PipDiddy]

We saw some mixed results for the franc yesterday, as USD/CHF climbed 25 pips to finish at .9205, while EUR/CHF edged even closer to its “floor” at 1.2000, as it closed the day at Could we see another SNB intervention?

Now that EUR/CHF is dangerously close to the 1.2000 peg, I can’t help but wonder whether SNB officials will do some jaw-boning. Take note that Thomas Jordan is now serving as interim SNB President, but rumors are that the central bank will name him as permanent within the next couple of weeks. Also, you should know that analysts believe that Jordan will simply carry with the monetary policy strategy that former SNB President Hildebrand laid out. Make sure you stay on your toes and be ready for some wild moves on franc pairs!

For today, we’ve got retail sales figures and the SVME PMI coming out at 8:15 am GMT and 8:30 am GMT respectively. Word on the street is that sales grew by 1.6% in December, while the index is projected to have increased from 50.7 to 51.7, indicating faster growth in the manufacturing sector. If the reports comes in much better-than-expected, it could give the franc another boost up the charts.

[PipDiddy]

Negative data?? No problem! The Swiss franc still managed to rally against the dollar yesterday despite disappointing economic reports. USD/CHF started the day on an upward rally, reaching an intraday high of .9250, before trading lower and closing the day 43 pips below its opening price at .9161.

It was reported yesterday that consumer spending was weaker in November than it was in October. The retail sales report printed at 0.6%, only a third of the 1.8% uptick we saw the month prior and disappointed expectations which was for a 1.6% growth.

On top of that, the SVME PMI printed a contraction for January, coming in at 47.3 and disappointing the 51.7 forecast. The report tracks the outlook of purchasing managers in Switzerland. And so, the reading for January would imply that businesses don't really have high hopes that economic conditions in the country will soon pick up.

Hmm, I wonder if the Swiss franc will still be able to get away with a win if the trade balance report for December comes in worse than expected. Due at 7:00 am GMT, it is anticipated to show that exports outpaced imports by 2.85 billion CHF.

Also, keep in mind that EUR/CHF is nearing the SNB's peg at 1.2000. As Forex Gump has said, the pair is on an intervention watch. So don't get too crazy buying the currency, ayt?

[PipDiddy]

What a bummer! It appears that the the threat of currency intervention, as well as the upcoming employment report from the U.S., kept the Swissy's price action muted all day yesterday. EUR/CHF, for instance, closed the day at 1.2050, just 2 pips higher from its opening price during the Asian session.

Switzerland's isn't scheduled to release any tier 1 data today but that doesn't mean that the Swissy will be dead again! At 1:30 pm GMT, the U.S. will publish its non-farm payrolls report.

The non-farm payrolls is usually to be a major market mover, so expect to see some fireworks on the charts upon the release. Given how quickly traders have been reacting to good news recently, better-than-expected data could result in a risk rally and hurt the safe haven Swissy.