Daily Economic Commentary: Switzerland

[PipDiddy]

Is that a new low I see? Why, yes it is! The Swissy was once again sold off yesterday as it made a fresh 19-month low against the safe haven dollar. Despite the new low, the Swissy traded relatively stable and closed the day with a mere 6-pip loss.

No major news report was released in Switzerland yesterday but today we’ll be treated to the country’s Producer Price Index. The PPI, which measures the monthly change in the price of goods and raw materials purchased by manufacturers, is expected to report a 0.2% decline for the month of June, just like May’s figure.

Since the PPI is considered as a leading indicator of consumer inflation, higher than expected figures are normally seen as bullish for the Swissy. Let’s see how the PPI will affect the Swissy’s price action later.

[PipDiddy]

Not so fast, franc bulls! Just when everyone thought that Swissy is in for a reversal, the franc bears launched another attack and pushed USD/CHF to its new one-year high at .9840.

The franc bears had help, of course. Thanks to risk aversion all over markets yesterday, currency traders became hungry for the Greenback. Too bad there weren’t any reports from Switzerland to give aid to the franc bulls.

Today the only report we’ll see from the land of the Swiss Alps is the PPI report out at 7:15 am GMT. The report doesn’t usually influence the franc pairs’ price action, so be careful in placing big positions on your franc trades!

[PipDiddy]

Thanks to weaker-than-expected U.S. economic data, the Swiss franc was able to recoup most of its losses to the Greenback for the past few days as USD/CHF slid close to its week open price of .9806 before the weekend.

Switzerland didn't release any big reports last Friday but the Swissy was able to take advantage of the U.S. dollar selloff that took place after Uncle Sam reported weaker than expected consumer confidence data. This was enough to get traders buzzing about QE3 again, which caused the Greenback to lose its shine for the entire day.

Today, Switzerland is set to release its industrial production report for the second quarter of 2012. This could show that industrial production slipped by 7.5% during the period, which would be worse than the previous period's 8.8% jump. If the actual figure comes within or below expectations, the Swissy might be forced to return some of its recent gains.

Switzerland has a couple more reports due during the latter half of the week, and these are the ZEW economic expectations figure due on Wednesday and the Swiss trade balance due Thursday. Stay tuned to my economic commentary to see how those reports could turn out!

[PipDiddy]

The franc won the safe-haven battle yesterday thanks to dollar-bearish news from the U.S. USD/CHF hit an intraday high at .9865 before the franc bulls attacked and dragged it to its .9783 closing price. What gives?

As I mentioned in my USD piece, the disappointing retail sales report rained on the Greenback’s parade yesterday as it supported arguments for more stimulus for the U.S. economy.

But will Big Ben Bernanke give in to the pressure? No data is scheduled for release in the land of the Swiss Alps today, but stay at the edge of your seats to see if there are any more news reports that could affect demand for the low-yielding franc!

[PipDiddy]

Tubthumping Tuesday for the Swissy! The Swiss franc got knocked out but it got up again during the U.S. session as USD/CHF closed 5 pips below its .9783 open price, after hitting a high of .9853. What caused all that commotion and will we see more fireworks today?

Switzerland didn't release any economic reports yesterday, leaving USD/CHF at the mercy of risk sentiment and U.S. data. The franc suffered a selloff during the London session thanks to weak economic releases from the U.K. and downbeat updates from the euro zone, but the currency managed to stage a strong recovery when Fed head Bernanke gave his testimony later on. Drop by my U.S. commentary to see how it all went down!

Only the ZEW economic expectations report is set for release from Switzerland today and it is expected to show a rebound from the bleak -43.4 reading seen last May. Although the index is likely to stay in the negative zone indicating pessimism for June, a reading higher than May's could enable the Swissy to carry on with its rally. Keep an eye out for that release at 9:00 am GMT.

[PipDiddy]

The Swissy gave as good as it got yesterday, but when all was said and done, it ended the day unchanged. After an uneventful start to the day, USD/CHF rallied strongly in the European session, tapping a high of .9831. But sellers struck back in the U.S. session, erasing all of the Swissy's losses to force USD/CHF to close right where it started at .9778.

Yesterday's lone Swiss report, the ZEW economic expectations index, upgraded its reading from -43.4 to -42.5 last month, indicating that expectations are beginning to stabilize in the land of Rolexes and cheese. Following the release of the report, the Swissy was sold off sharply against the Greenback, but it's hard to say if this was a reaction to the ZEW results, as most dollar pairs experienced a similar move at the time.

Today, we'll be treated to Swiss trade balance data, which most believe will show a slimmer surplus. Forecasts have it coming in at 2.21 billion CHF, down from 2.48 billion CHF in May. Though this report doesn't usually cause big moves on the charts, it could get Swissy bulls going if it prints a huge upside surprise. Catch the release at 6:00 am GMT if you want a piece of this action!

[PipDiddy]

USD/CHF traded lower during the Tokyo and London sessions. However, just when everyone thought the franc was about to make a run for pips, USD/CHF began trading higher! By the day's close, the pair was up 3 pips above its opening price at .9781.

Where did the franc's swagger go? It seems that concerns about rising bond yields in Spain weighed down not only the euro, but its Swiss counterpart as well. In fact, the negative vibes brought about by rising borrowing costs in the euro zone's fourth largest economy shadowed the positive trade balance report from Switzerland.

It was reported that the country scored a trade surplus of 2.25 billion CHF, topping expectations for a 2.21 billion CHF figure.

With our forex calendar blank for reports for the franc today, be sure you keep tabs on market sentiment. I have a feeling that without any economic report, the currency will remain vulnerable to the market's mood swings. Good luck!

[PipDiddy]

Even the Swissy wasn't spared from the dollar's mighty rally last Friday! It didn't stand a chance against the dollar's advances as it weakened from the very start of the day, falling almost 100 pips before the New York session came to a close.

Just as we had suspected, without any Swiss reports to support the currency, the Swissy fell victim to the markets' mood swings, a.k.a. risk sentiment. Unfortunately for Swissy bulls, sentiment favored risk aversion, which in turn favored the risk haven dollar.

Will we get more of the same this week? Perhaps! But in any case, you should probably continue tracking risk sentiment if you plan on trading USD/CHF, as Switzerland won't be publishing any reports until Friday, when it releases the KOF economic barometer (expected to rise from 1.16 to 1.24).

So in the meantime, make sure you keep tabs on risk sentiment, homies!

[PipDiddy]

The franc shook off a poor start and managed to edge higher versus the dollar, as USD/CHF closed 21 pips lower at .9897. Still, the pair failed to fill the weekend gap. Will it finish the job today?

No data headed our way today from Switzerland, but will all the focus on Europe right now, it would be prudent to keep an eye out for those Spanish yields!

[PipDiddy]

There it goes again! The Swissy found itself on the losing end of the equation as it slipped against the Greenback. USD/CHF finally broke above the .9900 handle, ending the day 53 pips higher at .9950. Can the market sustain these levels?

Well, that'll depend on risk sentiment! If risk aversion continues to dictate price action, it will most likely lead to more losses for the Swissy. On the other hand, if traders get their grub on and risk appetite improves, we could see the Swissy get back in the game and erase some of its recent losses.

Once again, nothing on the economic calendar for Switzerland today, so don't hold your breaths waiting for reports! Instead, check out what the U.S. has to offer if you plan on trading the news with USD/CHF. Good luck and happy pipping!