Daily Economic Commentary: Switzerland

Safe haven warriors attaaaack! With bad news continuing to pop up in markets and the SNB giving no hint at a currency intervention, more and more traders are flocking the safe-haven franc. EUR/CHF dropped by another 38 pips to 1.1497, while USD/CHF slipped by 35 pips to .8128.

Since the economic boards were empty in Switzerland last Friday, the currency bulls and bears were busy mulling over the reports from the euro zone and the U.S. The latest stress test results took center stage in the euro region. In the report, only 8 out of 91 banks failed, which cast doubts on the accuracy the test.

The dollar also struggled (and failed) to hold on to its gains when U.S. debt squabbles took its toll on dollar sentiment. I don’t know about you, but I wouldn’t blame investors for running to the safe-haven franc if more bearish news like those popped up this week!

For the next couple of days the franc will probably dance to the tune of risk appetite as the first economic report from Switzerland, the trade balance and ZEW economic expectations, won’t be released until Thursday at 6:00 am GMT and 9:00 am GMT respectively. Both reports are expected to come in a bit weaker than their previous figures, so make sure you keep a close eye on those!

USD/CHF may have gapped down over the weekend but the U.S. dollar was quick to outpace the Swissy yesterday. The pair opened at .8091, climbed to a high of .8195, before closing at .8177. Meanwhile, EUR/CHF also closed its weekend gap as it landed back above 1.1500.

Switzerland didn’t release any economic reports yesterday, leaving risk sentiment to drive the price action of Swissy pairs. Risk aversion, brought forth by ongoing debt concerns in the euro zone and in the U.S., had traders flocking back to the safe-haven arms of the U.S. dollar.

Today, Switzerland won’t be releasing any economic data again. But if you’re planning to trade USD/CHF or EUR/CHF, you can still find some news reports to trade by checking out my euro zone roundup and my U.S. economic commentary. Good luck!

Not today either, my friends. The currency bulls had to wait another day to enjoy a franc rally when a surge of risk appetite in markets weighed on the low-yielding currencies. USD/CHF climbed by 69 pips to .8248, while EUR/CHF also rocketed to 122 pips to 1.1665.

Since there were no reports released from Switzerland yesterday, the franc traded purely on risk appetite. Small improvements in the euro region and the U.S. were enough to ward off the franc bulls for another day.

Today we’ll still have to keep close tabs on risk sentiment as there are no reports scheduled from the land of the Swiss chocolates once again.

Mixed day for the Swissy yesterday as it managed to end higher than the U.S. dollar but held steady against the euro. USD/CHF landed at .8198, 51 pips below its .8249 open price, while EUR/CHF snapped back to its 1.1665 open.

Risk appetite seemed to stay on track yesterday but traders still dumped the U.S. dollar in favor of the Swiss franc because of the looming debt problems in the U.S. Better check out my U.S. economic commentary to find out what’s going on out there!

Switzerland didn’t release any economic data yesterday as it geared up to release a couple of reports today. The trade balance is due 6:00 am GMT and is expected to show that their surplus narrowed from 3.25 billion CHF to 2.87 billion CHF in June. This was probably because the Swissy rallied strongly back then, putting a bit of a dent on their exports.

Later on, the ZEW economic expectations will be released at 9:00 am GMT. The reading landed at -24.3 in June, suggesting that investors and analysts were pessimistic about the economic prospects of Switzerland. If the index lands back in the positive territory this July, the Swissy could have another reason to rally. Otherwise, if the reading comes in worse than the June reading, we might see the Swissy give up its recent gains.

Like kryptonite to Superman, the Swissy weakened against most of its counterparts at the sight of risk appetite. (That rhymes yo!) However, it was able to gain ground against the U.S. dollar, although we did see a few reports from Switzerland weren’t exactly Swissy-bullish.

The Swiss trade balance was anything but helpful. Its surplus was practically halved as it fell to 1.75 billion CHF, far worse than the 2.87 billion CHF consensus forecast. The silver lining is that Swiss watch exports saw a healthy rise in June. Gotta get them Rolexes, son!

On another, equally disappointing note, the ZEW economic expectations report reported a MASSIVE decline in July. It dropped from -24.3 to -58.9, taking the index to its lowest point in over two years! The Swissy’s unstoppable rise and the Euro debt crisis have caused investors to be less optimistic about Switzerland’s growth outlook.

Nothing more to see today. For now, keep an eye on the U.S. as it makes its decision regarding its debt ceiling. Peace out!

Ouch! The Swissy took a hit from both the U.S. dollar and the euro last Friday, as USD/CHF closed 10 pips up from its .8169 open price while EUR/CHF landed 2 pips above the 1.1750 level. These pairs gapped down over the weekend though, so let’s find out whether the Swissy could keep it going.

Switzerland didn’t release any economic data last Friday but weak figures from the euro zone, particularly the German Ifo business climate report and the Italian retail sales figure, dried up demand for the Swissy.

Tomorrow, Switzerland will release its UBS consumption indicator at 6:00 am GMT. The figure landed at 1.91 in May and could show an even higher reading for June if consumer activity was strong in Switzerland last month.

On Wednesday, a more comprehensive economic indicator, the KOF economic barometer, is set for release. After dipping from 2.30 to 2.23 in June, the index is set to post another decline and drop to 2.13 this July.

No other reports are due from Switzerland this week so make sure you get a good feel of risk sentiment before taking any Swissy trades. Good luck!

Outta the way, Swissy coming through! With a lot of uncertainty still hanging in the air regarding the U.S. and Europe, the Swiss franc remained the currency of choice of many traders. USD/CHF ended the day at a NEW ALL-TIME LOW of .8061 after falling 45 pips.

After a few days of sideways trading, the Swissy was finally able to break out of consolidation to hit new highs against the dollar. It fared just as well against the euro as EUR/CHF dipped 88 pips during yesterday’s trading.

Can we expect it to continue rising today? Well, that’ll depend on two things: today’s UBS consumption indicator and risk sentiment.

If the UBS consumption indicator (due 6:00 am GMT) prints a reading well above 5.6, the consensus forecast, the Swissy may receive a mini boost. Likewise, should risk sentiment turn sour again, it wouldn’t be surprising to see it hit fresh highs against the dollar and the euro.

The Swiss franc continued its dominance of the charts, setting yet another all-time high versus the dollar. USD/CHF is now just above the .8000 handle. To put things in perspective, the pair has now dropped 1300 pips from its opening price this year! Ka-chow!!!

With the markets unsure of what’s gonna happen on both sides of the Atlantic, investors have poured their money into the franc, causing it to soar to all-time highs. Any pullbacks or retracements will most likely be seen as opportunities for the bulls to add to their long Swiss franc positions.

For today, we’ve got the KOF economic barometer index scheduled for release at 9:30 am GMT. The index is projected to fall from 2.23 to 2.12, which would mark its lowest level in six months. If the report comes in worse than expected, it cause the franc to give back some of its gains from earlier this week.

Mixed results for the Swissy as sellers pulled it this way and buyers pulled it that way. While traders bought it up against the euro, they weren’t as eager to do the same against the dollar… at least not with USD/CHF facing strong support at 0.8000!

The only piece of data from Switzerland was the KOF economic barometer, which turned out to be a big non-event. Despite the fact that the index ticked down to its lowest level in over a year, from 2.23 to 2.04 (versus 2.12 forecast), the Swissy didn’t budge. Some say this is proof that the Swissy’s rise is finally taking its toll on the economy. Will this be enough to cause the SNB to intervene? Only time will tell!

It looks like we’ll have to chew on that for today since Switzerland won’t have any reports coming out. For now, it’s best you keep an eye on the U.S. if you plan to trade USD/CHF. Good luck!

Looks like that .8000 handle is too much for the Swissy to break through! Once again, USD/CHF found good support at the major psychological handle and has now formed TWO dojis on daily chart at the level. Is this the bottom for the Swissy?

Even with risk aversion rampant in the markets, the franc could not push further ahead against the dollar. Part of the reason is that we’re not seeing as much movement in the markets right now, giving the franc bulls less momentum to charge ahead. Also, the Swissy has seen an enormous drop, so it is possible that we’re seeing a temporary bottom and that a retracement is coming soon.

Oh Swissy, you’re so fine, you blow my mind! The currency once again posted new highs against the euro and the dollar. EUR/CHF ended the day 165 pips lower from its opening price at 1.1308 while USD/CHF closed 234 pips below the week open price at .7872.

Swissy bulls didn’t need any economic report from Switzerland to hustle some muscle up the charts. There was enough talk about fiscal problems in the U.S. and Europe to convince traders to sell other currencies and buy up the Swissy.

So with still no data for the currency today, make sure you get a good feel of the market’s mood. If debt talks continue, we may just see the Swissy post new highs. Keep in mind though that traders may be wary of pushing it any further as the talks of an SNB intervention circle around the FX hood.

Once again, the mighty franc has set a NEW all-time high versus the dollar, as USD/CHF clocked in 88 pips lower at .7833. Is there no stopping the Swiss franc?!

Quite frankly, I don’t see anything stopping the franc right now. It’s on a major tear and with risk aversion dominating the market, the franc could be in for another week of gains.

Looking at today’s calendar, I see that we do have some catalysts for franc pairs in the form of retail sales data and the SVME PMI report. Word is that year-on-year sales rose by 1.6%, opposite the 4.1% drop we saw in last month’s release. Meanwhile, the SVME PMI report is projected to print at 52.3, down from the previous month’s score of 53.4, but still indicating expansion.

If these reports come in better than expected, it would just give more reason for franc bulls to keep buying. Tune in at 7:15 am GMT to find out what happens!

Aaah, there’s nothing like good data and risk aversion to fuel the Swissy’s rally to fresh all-time highs. Holler! USD/CHF ended the day 183 pips below its opening price at .7650. Meanwhile, EUR/CHF closed a whopping 295 pips lower from where it opened at 1.0873.

We saw yesterday that consumer spending picked up in Switzerland in June when the retail sales report came in at 7.4% and beat the measly forecast of 1.6%. On top of that, the factory PMI for July printed higher at 53.5 than the 52.3 consensus.

Today we don’t have anything on tap for the Swissy. However, I think that as long as concerns over the U.S. economy and Europe’s sovereign crisis continue, we may just see the Swissy post new highs!

Uh oh. It seems like the fears of the Swissy bulls have finally come to life! Yesterday, in the libor rate announcement, the Swiss National Bank (SNB) showed concern about the strengthening franc and lowered the 3-month libor rate to 0.0%-0.25% from 0.0%-0.75%. As a result, the Swissy took a major hit across the board.

According to the SNB, the Swiss franc was “massively overvalued” and the central bank must take some steps to prevent it from rising further. While the bank has not yet intervened, the bank cut interest rates and would expand the money supply. Generally speaking, the more supply of something there is, the cheaper it becomes.

With the Swiss franc in danger of losing footing due to a potential currency intervention, which safe haven can traders put their money? The dollar perhaps?

In any case, let’s see whether the Swissy will continue to lose ground today. Keep a close eye on EUR/CHF, as it could continue to rise on intervention fears.

The Swissy’s still got swagger like Mick Jagger! It ended yesterday’s trading at its new all-time high against the euro at 1.0762 after opening at 1.1013. Meanwhile, USD/CHF closed 55 pips below its opening price at .7636.

Our forex calendar was blank for reports from Switzerland yesterday but there was enough risk aversion to go around and fuel the Swissy’s rally. Remember that the currency is touted by many as a “safe haven” and investors usually flock to it in times of trouble.

So with still nothing on tap for the Swissy today, make sure you get a good feel of the market’s mood. If concerns over the euro zone continue, we may just see it post new highs again!

Why, thank you downgrade! Thanks to S&P credit rating downgrade of the U.S., traders flocked to the safety of the Swiss franc. USD/CHF is currently trading at the .7600 level, 72 pips lower from its close last Friday.

While the Swissy was able to rally, data from Switzerland didn’t share the same positive story. The CPI report released last Friday came in at -0.8%, worse than the -0.5% initially expected. With the Swiss National Bank extremely worried about the overvalued franc, the declining prices could force the central bank to intervene much sooner.

No important data reports on Switzerland’s economic calendar this week so the Swissy will likely be driven by news from other major economies like the U.S. and the euro zone. Debt downgrade talk should also be closely monitored.

Good luck trading this week folks!

The franc is on a roll! Thanks to continued risk aversion in markets, the franc continued to strengthen against its major counterparts yesterday. USD/CHF rose to fresh record highs and closed 107 pips lower than its closing price last Friday, while EUR/CHF also suffered a 126-pip loss at 1.0730.

Aside from the overall risk aversion in markets, it might’ve encouraged the franc bulls that Switzerland’s unemployment rate, the only data out from the country yesterday, ticked down to only 2.8% in July from its 3.0% figure in June. That’s less than 3 people unemployed for every 100 Swiss in the country!

Let’s see if Switzerland can keep up its good vibes today when the SECO consumer climate report is released. Analysts are expecting the index figure to slip to -7 in the second quarter from its -1 reading last May, but a more positive note might boost the franc to even fresher record highs against its counterparts.

Good luck in your trades today!

There’s no stopping the Swissy bulls! It appears that traders couldn’t care less about the threat of currency intervention from the Swiss National Bank (SNB) as they decided to just buy up the Swissy like crazy yesterday! USD/CHF ended the day at .7244, 316 pips (no, that’s not a typo) lower from its opening price that day. So far this year, the pair has declined around 27%!

The drop of USD/CHF was rooted externally, rather than from within Switzerland. In its interest rate statement yesterday, the U.S. Federal Reserve announced that economic growth this year was not as good as they initially expected. Economic data also suggested that the labor situation has actually declined. The Fed also promised to keep rates at exceptionally low levels for the next two years.

If the U.S. isn’t doing so hot and debt contagion fears plague euro zone, which country should you run to? Switzerland of course!

No data coming out today from Switzerland but if this kind of market sentiment persists, the Swiss franc stands to gain even more due to its safe haven appeal.

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.