Daily Economic Commentary: Switzerland

Expansion of bank deposits? Pfft. Not even that is going to rain on the franc bulls’ parade! Despite the SNB’s announcement yesterday, traders continued to push the safe-haven franc to lows against its major counterparts. USD/CHF gave up another 39 pips at 1.1726 while EUR/CHF lost 45 pips at 1.0308.

In an effort to stem the franc’s gains, the SNB rocked the early London session by announcing its plans to expand Swiss banks’ deposits from from 80 billion CHF to 120 billion CHF. We know from the School of Pipsology that this would increase money supply in markets, which is usually bearish for the currency.

Too bad that the franc bulls were too excited to pay attention to it! After spiking down by more than 100 pips against its pip buddies, the franc went on its merry way up and still ended the day in the green.

There won’t be any interesting reports coming out from Switzerland today, but keep close tabs on risk sentiment, aight? We never know when the multi-hundred pip moves are gonna happen again!

Whoever said “Sticks and stones may break my bones but words can never hurt me,” obviously didn’t know the Swiss National Bank (SNB)! The Swiss franc was downright murdered on the charts yesterday as SNB Deputy President Thomas Jordan did a bit of jawboning. As a result, USD/CHF climbed 356 pips just as EUR/CHF rose 541 pips. Insane!!!

While improved risk appetite had a hand in weakening the franc, what really beat the Swiss currency down was the threat of action from the SNB. In an interview, Thomas Jordan (not to be confused with his Royal Airness, Michael), said that Switzerland can legally peg the franc to the euro to slow down its rise.

Of course, traders balked at buying the Swiss franc when they heard this because unlike usual market interventions, pegging the franc to the euro would put continuous pressure on the franc.

Phew! Quite a lot to think about, if you ask me. On the bright side, you’ll have all day to chew on that bit of info since Switzerland won’t be releasing any reports today. You might also want to keep tabs on risk sentiment. If risk appetite picks up, the Swiss franc will probably chalk up more losses.

That’s 2-0 in favor of the franc bears! For the second day in a row the franc got clobbered on the charts last Friday on another round of risk appetite in markets. USD/CHF tacked on another 144-pip gain at .7775, while EUR/CHF also rose by 221 pips to 1.1080.

Though the SNB hotshots took a break from their jawboning last Friday, the markets hadn’t quite forgotten their actions early in the week. As it turned out, the possibility of a peg against the euro, lower SNB interest rates, and more bank deposits were just too convenient a time for the franc investors take some profits amid the burst of risk appetite in markets.

No biggies coming out from Switzerland this week with only the PPI report at 7:15 am GMT scheduled for release. Still, keep your eyes peeled for any surprises from the SNB, aight? If the franc pares its losses and continues to make new highs against its counterparts, then we just might see more of the tricks up the SNB’s sleeves!

Even though USD/CHF gapped higher over the weekend, the pair was able to make quite a turnaround when it came close to the .8000 mark. From there, the pair retreated by almost 150 pips when it closed at .7856. What’s been driving the Swissy lately?

The Swiss franc climbed all the way up to a high of .7998 during the London session when news broke out that the SNB could come up with a way to limit franc strength. It didn’t help that there was already ongoing speculation that the central bank would peg the value of the franc to the euro. After all, Swiss economic authorities are getting increasingly worried that their currency’s appreciation could eventually hurt their export industry and spur deflation.

Proving just that was the Swiss PPI report released yesterday, which showed that input prices fell by 0.7% in July, worse than the expected 0.5% drop. Declining producer prices typically lead to a drop in overall inflation.

Switzerland won’t be releasing any economic data today so keep your eyes and ears peeled for any SNB attempts to stop the Swissy from rallying.

More losses for the Swiss franc! For the fourth straight day, the safe haven currency weakened against the dollar and the euro as it continues to be bogged down by the threat of an SNB intervention. Will it continue to slide today?

Well, we’ll find out soon enough as Switzerland’s leaders will be meeting today to talk specifically about the franc! The Swiss government is set to discuss the franc’s recent appreciation in a meeting sometime today. Rumor has it that the government might finally set a floor for the EUR/CHF and peg the franc to the euro as many franc bulls had feared.

In any case, you’d best stay on your toes today as we could be in for another wild ride on the Swissy train. If word gets out that the SNB is planning to push through with pegging the franc, it could very well lead to another sharp selloff.

Fail! No matter how hard it tried, the SNB was unable to keep the franc from rallying yesterday. USD/CHF found resistance at the .8000 area and dropped by almost a couple hundred pips before closing at .7890. Meanwhile, EUR/CHF ended 10 pips below the 1.1400 handle. Will the SNB make another attempt to hold down the franc today?

“Try and try again” seems to be the motto of the SNB as it launched another attempt to pull down the Swiss franc. However, their attempt failed miserably since they didn’t say anything about their plans to peg their currency to the euro. Market participants were disappointed to find out that there wasn’t much progress yet and that the SNB would resort to its usual expansion of franc deposits.

In terms of economic data, Switzerland’s calendar is empty today, just as it was yesterday. With that, better keep your eyes and ears peeled for more verbal jawboning from the Swiss central bank. Good luck trading, fellas!

The Swissy pretty much gave as much as it got yesterday, chalking up mixed results against its major counterparts. While USD/CHF inched 42 pips higher, EUR/CHF slid down 19 pips. Will it get more consistent results today?

The markets experienced a bit of risk aversion yesterday, as evidenced by the drop in equities and commodities. But surprisingly enough, the Swissy wasn’t the currency of choice among traders, as it had been in the past. Instead, the dollar was one of yesterday’s biggest gainers.

It seems the threat of an intervention from the Swiss National Bank has been successful in keeping Swissy bulls at bay. It certainly did well to limit the Swissy’s appreciation yesterday.

For today, it looks as though we’ll have to trade according to risk sentiment since Switzerland won’t be publishing any reports. Y’all know the drill. If risk sentiment turns sour, expect Swissy power!

Can you say, RANGE? For all of last week, the Swissy stayed within a range of 200 pips between .7800 and .8000. What could cause the pair to break out of this consolidation?

Could it be trade balance figures, which are scheduled to come out tomorrow? Perhaps if the report prints a figure way worse than the anticipated 1.83 billion CHF surplus, it could send USD/CHF soaring above the .8000 handle.

Or could it be employment data, which will hit the airwaves on Thursday? Word is that Swiss employment will come in at 4.11 million, the same as the previous quarter.

Maybe we’ll see consolidation until the end of the week, when the KOF Economic Barometer index is released. Take note that this is a high impact event, so it could prove to be the catalyst to bust USD/CHF out of its range!

In any case, just stay on your toes and be ready for a breakout! You never know, our buddies over at the SNB might just open their mouths and rock the markets!

Dojis, dojis everywhere! Trading the Swissy was an absolute bore yesterday as it remained flat against its two major counterparts. USD/CHF finished hardly unchanged at .7898 just as EUR/CHF finished 8 pips lower at 1.1344.

The only report on tap for today is the monthly trade balance report. Expect to see Switzerland’s surplus expand from 1.77 billion CHF to 1.83 billion CHF.

Aside from a better-than-expected figure from the aforementioned trade balance report, we could see a Swissy rally as a result of risk aversion in anticipation of the Jackson Hole meeting on Friday. A lot of questions will remain unanswered until then, and this could lead to safe haven flows in favor of the Swissy. However, keep in mind that the threat of a Swissy-euro peg still remains, and could limit and gains in the Swiss currency.

Ranging, ranging, ranging! That’s all what franc pairs have been doing lately! Once again, USD/CHF traded within a tight consolidation of just 80 pips, as traders are unsure what to do with the pair. Will we finally see a breakout today?

Chances are no… UNLESS of course, the SNB decides to intervene in the markets. After all, it’s been the threat of SNB intervention that has kept franc trading subdued over the past week. While there is still a lot of tension in the markets, traders are afraid to keep buying up the franc.

For the meantime, all you Swissy traders just be patient and once you see a breakout of the consolidation, make sure you’re ready for some wild moves!

Whoa! Even the mighty Swissy was no match for the dollar in yesterday’s trading! USD/CHF closed higher for the third consecutive day in a row, ending the day 33 pips above its opening price at .7950. EUR/CHF also continued its uptrend, finding support at 1.1400 and closing at 1.1463.

Some market junkies believe that the Swissy’s losses could be because traders aren’t so pessimistic about the global economy as they were before.

With that said, make sure you get a good feel of market sentiment before you decide to play the Swissy. Keep in mind that the currency usually rallies when risk aversion picks up.

Aside from that, keep tabs on the reports we have from Switzerland today. At 7:15 am GMT, the employment report for Q2 2011 will be released and it is expected to show that the number of employed people remained steady at 4.11 million, matching the figure for Q1 2011.

Then at 9 am GMT, the ZEW economic expectations report for August will be released. Watch out for a figure better than the -58.9 reading we saw for July as this would indicate an improvement in consumer sentiment and may consequently be bullish for the Swissy.

Hmph! Data schmata! Despite a negative report, the Swissy was still able to end yesterday’s trading with a win against most of its counterparts. USD/CHF ended the day 26 pips lower at .7925, while EUR/CHF was down 63 pips for the day at 1.1401.

The ZEW Economic Expectations report for August showed further pessimism among investors when it printed lower at -71.4 than July’s -58.9 reading. But as I said, it seemed like it didn’t keep the Swissy from kicking butt in yesterday’s trading. Perhaps traders were already reducing their risks ahead of the much-anticipated Jackson Hole Symposium.

For today, we also have another high-caliber report from Switzerland on tap later at 9:30 am GMT. The KOF Economic Barometer for August is seen to come in at 1.84 but a worse than expected figure may give investors enough reason to flee the Swissy as this would indicate that economic growth could slow in the next few months.

Make sure you don’t miss that and also remember to keep tabs on market sentiment if you’re planning to trade the Swissy!

Kaboom! Thanks to the initial dollar rally during the Jackson Hole Symposium, the Swissy blew past the .8000 handle! After hitting as high as .8157, USD/CHF settled at .8077, marking an impressive 147 pip gain for the day. Not bad!

Part of the reason why the franc may have lost its footing last Friday was probably due to the dismal KOF economic barometer report, which printed a reading of just 1.61. Not only was this way off the projected 1.84 level, but it was a major drop from last month’s release of 1.98 and marked the index’ lowest level in nearly two years.

This indicates weakness in the Swiss economy and that the struggles of other nations are finally hurting Switzerland.

No biggies on the docket till Thursday, so I suggest keeping an eye on risk sentiment to gauge whether the Swissy can stay above the key .8000 level.

The Swissy continued its losing streak yesterday as traders grew more optimistic about the global economy. Apparently, Greece’s Alpha Bank agreed to purchase Eurobank Ergasis and helped the country’s main equity market index surge 14%. This gave traders reason to believe that the worst of the debt crisis in Greece is over. EUR/CHF found itself trading at 1.1838 by the end of the U.S. trading session, 134 pips higher from its day open price.

Today, the Switzerland’s economic calendar only offers us the UBS consumption indicator. It is scheduled to come out at 6:00 am GMT. Last month, the report printed a reading of 1.48. If the figure later manages to beat that figure, we may see the Swissy regain some of its losses.

Is the Swissy losing its swag? The currency extended its losing streak against the dollar yesterday when USD/CHF ended the day 34 pips above its opening price at .8198. Meanwhile, EUR/CHF also ended the day higher by 4 pips at 1.1850.

Without any economic data on tap, it seems like the Swissy has become victim to market sentiment. Our forex calendar is once again blank for data from Switzerland today, so it’s probably a good idea to get a good feel of the market’s mood first before betting on the Swissy.

Don’t worry, tomorrow we’ll have a lot of high-caliber data to sink our teeth into as the GDP, retail sales, and manufacturing PMI reports are due to be released!

The Swissy finally decided enough was enough and cut its string of losses with a stellar win yesterday. The safe haven Swissy capped off the U.S. trading session with a 141-pip gain over the Greenback and a 270-pip victory versus the euro.

The Swissy’s strength was the result the government’s response to the strong Swissy. Swiss Econcomy Minister Schneider-Amman said that although the competitiveness of the country’s exports has taken a hit, they have to live with the strong Swiss franc for quite some time. He also said that the currency intervention expectations of the market were greatly exaggerated.

Today, Switzerland’s economic calendar has two important reports for us.

First is the retail sales report at 7:15 am GMT. The market predicts a 4.6% rise, which is lower than the previous month’s huge 7.6% increase. Second is the SVME Purchasing Managers’ Index. The SVME PMI is slated to fall to 51.1 from last month’s 53.5.

Who’s the boss now? Despite weak economic reports from Switzerland, the franc still managed to dominate the charts like a boss, gaining 242 pips on the euro and 117 pips against the dollar. Whoo!

Data released from Switzerland yesterday revealed that retail sales only grew by 1.9% in July against its 7.9% growth in June. In addition, the country’s GDP report showed a 0.4% growth for the second quarter, which is a bit weaker than the previous 0.6% growth reading. Lastly, the SVME PMI dropped to 51.7 in August from its 53.5 number in July.

Good thing for the franc bulls that risk sentiment ruled over markets! Concerns on global economic growth escalated on weak economic data from the euro zone, U.K., and the U.S., which made the low-yielding franc attractive to investors.

Will the franc go for gold today? Switzerland is set to release its employment figures today at 7:15 am GMT, but traders will also keep a close eye on the big NFP report from the U.S. at 12:30 pm GMT. The report usually sparks crazy volatility in the markets, so make sure you’re glued to the tube at the release of the report!

Good luck in your trades today, kids!

It was employment data galore last Friday as both Switzerland and the U.S. released their respective reports on the labor market. Both reports were disappointed, yet the Swissy was the one that came out on top. The Swissy was able to gain a respectable 45-pip gain versus the Greenback.

Switzerland’s quarterly employment level report printed a 2.77 million figure, significantly lower from the 4.11 million initially expected. This means that the number of full-time employees by 1.34 million for the second quarter of 2011.

In the U.S., the non-farm payrolls showed that no jobs were added in August. The forecast was for a 74,000 gain.

This week, Switzerland only has its CPI report to offer. Scheduled to publish at 7:15 am GMT tomorrow, it is expected to show a that the inflation rate improved to- 0.1% from -0.8%. Let’s see if the actual figure manages to come in better than that and help the Swissy continue its rally.

What’s that? No news report from Switzerland and the franc gained across the board? Risk aversion must be on like Donkey Kong! EUR/CHF ended up with a 73-pip slide to 1.1093, while USD/CHF also slipped by 13 pips to .7873.

Even with U.S. session traders out for a long weekend and many European traders enjoying the last days of summer, trading was still volatile yesterday. As it turned out, concerns on the euro zone and the U.S. economic growth were enough to give investors heebie-jeebies.

As attractive the low-yielding franc is though, you should be careful not to buy it up like there’s no tomorrow. Word on the hood is that the SNB is still ready to take action if the franc dramatically strengthens in markets again.

At 7:15 am GMT today Switzerland is due to release its CPI report for August. Analysts are expecting inflationary pressures to slip by -0.1% for the month after a 0.8% slide in July, but a higher figure might push the franc higher in the charts.

Awesome advice on not buying CHF - it sure did tank!