Daily Economic Commentary: Switzerland

[ForexGump]

The CHF just refused to let the USD retrace some of its losses in yesterday’s trading session. The USD/CHF attempted to rally above 1.0200 but sellers proved to be too strong as they brought the pair back down towards the 1.0150 price level before the US session ended.

In economic news, the ZEW economic expectations report improved to 65.0 from 58.0. This means that investors are getting more and more optimistic about the state of the economy. The “line in the sand” figure is zero, and a figure higher than that indicates optimism.

The report on retail sales could produce some fireworks in the USD/CHF pair later today. The estimate is that sales grew 1.1% in August. If forecast holds, it would be an improvement from the previous reporting period’s 1.0% increase. A higher than expected figure could lift the CHF against the USD again on account of risk appetite. The report is due at 9:00 am GMT.

[ForexGump]

The Swissy lost some ground against the USD, as it got caught up in a strong dollar move. The pair closed the week at 1.0187, after it had tested as low as 1.0120 within the week.

A report released on Friday showed that retail sales have fallen by 1.0% from a year ago. This was disappointing, as it was expected that retail sales would rise by 1.0% from last year’s levels.

Empty week for Swiss reports, as no high impact report are on deck for this week. CHF trading will most likely be driven by shifts in risk sentiment. Be on the lookout for strong moves, especially during the US trading sessions when key earnings reports are released.

[ForexGump]

Drawing strength from the surge in risk appetite, the Swissy overtook the greenback during Monday's trading. Switzerland and the US did not release any economic reports yesterday but, with the DJIA reaching a fresh yearly high, the USDCHF fell to a low of 1.0103.

Switzerland's economic schedule for today is report-free as usual but economic reports from the US could dictate where the USDCHF would go next. Data on building permits and housing starts are expected to be on the positive end, which might cause the greenback to rally based on fundamental strength. But if risk sentiment stays in the driver's seat, then upbeat housing market reports should push the USDCHF lower.

Also, earnings reports from top companies such as Pfizer and Coca-cola are on today's docket. If today's earnings reports show weak figures, then risk appetite could retreat and allow the USDCHF to recover some of its losses.

[ForexGump]

Despite the overall strength of the USD in yesterday’s trading, the Swissy still managed to reach a new yearly high against the dollar. The USDCHF pair fell to fresh low of 1.0083 before closing at 1.0127. The 1.0100 support appears to be keeping the pair afloat at least for now. Though, the pair could fall down to the psychological 1.0000 mark if this level breaks.

No economic reports were due in Switzerland yesterday. Despite the absence of positive reports in Switzerland and the somewhat bearish sentiment on the markets, the CHF still advanced over the dollar, with the USDCHF pair marking a new low.

Switzerland will be idle today as well in terms of economic updates. The Swissy would probably just look for leads from the other currencies regarding its short term direction.

[ForexGump]

The CHF joined in on the EUR's success as it, too, made significant headway against the USD. The USD/CHF pair made another yearly low, hitting the 1.0050 for the first time since July 2008.

No economic data is expected out of Switzerland today so expect the CHF to take queues from the EUR/USD pair regarding its price action. The USD/CHF and the EUR/USD pairs tend to have a tight inverse correlation. This means that whenever the EUR/USD starts climbing, the USD/CHF does the opposite and heads lower.

[ForexGump]

The CHF seems poised to reach parity with the dollar, as it finished higher against the USD once again. The pair closed at 1.0041 - could today be the day it reaches 1.000?

A report showed that the Swiss trade surplus widened to 1.92 billion CHF during the month of September. This was slightly better than expected, as the surplus was expected to be at 1.59 billion CHF.

No data on deck today, so watch out for data coming out from other countries. Also, watch out for the EUR/USD pair, which is now trading above 1.5000. Lastly, also be aware of potential profit taking since it is a Friday.

[ForexGump]

The USDCHF has been inching closer and closer to the 1.0000 mark, reviving concerns about the possibility of currency intervention by the SNB. Increased risk tolerance last week drove the USD lower against the CHF... Would USD weakness carry on for another week and bring the USDCHF to parity?

The main events on Switzerland's economic schedule for the week are the release of the UBS consumption indicator and the KOF economic barometer. The UBS consumption indicator, which is due Tuesday 7:00 am GMT, could chalk up another month in declines. The indicator stood at 0.96 in June but tumbled down to 0.66 in August. No forecast has been given but if we see this indicator break free from the downtrend, then the USDCHF could edge even closer to 1.0000.

The KOF economic barometer is due on Friday 10:30 am GMT. The indicator is expected to rise from 0.85 to 1.16 in October. If the actual figure fails to meet expectations, then the USDCHF could climb back up.

Earnings reports from several US companies are due this week with the US advanced GDP report also on tap. Watch out for sudden shifts in risk sentiment!

[ForexGump]

The Swissy was not able to save itself from the yesterday’s dollar rally. Just last Friday, the USDCHF marked a new yearly low at 1.0034. Yesterday, the pair sprung back to a high of 1.0203 before closing at 1.0181.

Switzerland was report-free yesterday. As mentioned, the Swissy weakened against the greenback due to the emergence of risk aversion in the US equities markets. Fears regarding the economy surfaced once again as market participants worry about the expiration of the government’s tax credit for homebuyers. Such could have a negative impact on home sales. Moreover, the Bank of America is said to sell new shares to pay back the government’s bailout money. Doing so would effectively dilute its shares.

Today’s calendar will be relatively light with only the release of the UBS consumption indicator for September due at 7:00 am GMT. The index posted a score of 0.658 last August. It’s probable that the account could register a dismal number given the unexpected 1.0% y/y drop in retail sales for the same period. This could further weigh down on the CHF.

[ForexGump]

The Swiss franc started the day on a strong note yesterday but eventually fell when risk aversion caused by poor CB consumer confidence figures came out. The USD/CHF pair, which opened the Asian trading session at 1.0181, closed the US session at 1.0218.

Improvement in the UBS consumption indicator for September failed to provide support for the franc. The report, which is a combined reading of economic indicators related to consumer spending, printed 0.63, slightly higher than last reporting period’s revised down figure of 0.62.

No economic data due today so the franc’s price action would primarily be dictated by data coming out of euro zone and risk sentiment.

[ForexGump]

The USD cut up the CHF like Swiss cheese, and the pair shot up in yesterdays trading session. The pair closed the day at 1.0271.

With not much data coming out recently, the USDCHF has been relying on degrees of risk sentiment. As a result, the pair has been rising as of late, as traders and investors have been avoiding risk this week. So once again, be aware of data that is coming out from other countries. For today, watch out for the US Advanced GDP report that is coming out at 12:30 pm GMT.

Tomorrow will be a little more interesting, as the KOF economic barometer index is due at 10:30 am GMT. The index - which tries to measure the direction of the economy - is expected to rise to 1.16, after posting a reading of 0.85 in September.