Okay make that ten. Ten consecutive days of the CHF closing higher from its Asian open against the USD. The currency also posted minor gains versus the EUR yesterday despite the fear that the Swiss National Bank would meddle with the EURCHF�s pair exchange rates again.
The Swiss National Bank decided to keep the rate unchanged at 0.25% for the third quarter in a row as future recovery remains uncertain. In addition, the SNB did their usual �OMG, we gonna make sure you guys don�t take the franc too high against the euro, yo� (not their exact words) spiel. It seems to be working though as the euro has appreciated more than 2.5% against the franc ever since the SNB�s first intervened last March 12.
The next important economic data set for release will be the SECO economic forecast and the Swiss trade balance on Tuesday next week.
And the winning streak finally comes to an end! After 10 straight days of gains against the USD, the Swissy got caught along with other majors by the strong up move by the dollar. The USDCHF closed the week at 1.0303. With concerns regarding how much lower the dollar can go, what is next for the pair?
Nothing scheduled for release today, although tomorrow we�ve got the SECO economic forecasts and trade balance figures due at 5:45 am GMT and 6:15 am GMT respectively.
The SECO report contains forecasts for major components of GDP, such as consumer spending, investment, inflation and employment. If a favorable outlook is printed, we could see a further boost in the CHF.
The trade balance in the month of August is expected to have dipped to 2.03B CHF, while July�s figure is expected to be revised down from 2.35B CHF to 2.21B CHF. This report may have little effect on the markets, as traders may focus on the SECO report which comes in earlier.
Later this week, we could see some fireworks as SNB members Thomas Jordan and Philip Hildebrand will be speaking at separate events. Hildebrand will be talking at a banking conference at Chicago, while Jordan will be delivering a speech entitled, �Current Topics of the Swiss National Bank.�
Hmmmm� I�m just going to make a guess here, but I think that the strong rise of franc may just be one of those topics� which may lead to more �threats� of currency intervention. Of course, we�ve been hearing a lot of verbal intervention on the part of the SNB, but for the most part, it seems like the markets have just ignored it. Could this finally be the week where the SNB actually does intervene?
The Swissy bowed down to the Greenback yesterday as investors carried on with their profit-taking from their short USD positions. Missing the presence of Japanese traders who were on a holiday, trading volume was relatively light in the currency markets at the start of the week.
Switzerland has a couple of reports on today’s docket: SECO economic forecasts and trade balance. Released quarterly, the SECO economic forecasts report gives estimates for important economic indicators like employment and inflation and the major components of the GDP, such as consumption and investment. This could have a significant impact on the price action of the Swissy, especially if the report indicates that Switzerland has a chance of climbing out of the recession in the next quarter. The release of this report is at 5:45 am GMT.
Trade balance figures will be released soon after, at 6:15 am GMT. Switzerland’s trade surplus is expected to contract from 2.21 billion CHF to 2.03 billion CHF in August. If the trade surplus contracts more than expected, then things aren’t looking too good for the Swissy…
The Swissy reached a fresh yearly low against the USD yesterday. The USDCHF closed at 1.0234 from a high of 1.0332. The pair is currently consolidating above the 1.0200 support. Will this level hold? Or will the bearish sentiment on the USD continue to pull the pair lower?
The SECO economic forecasts estimate consumption, investment, employment, inflation, and the like. Based on yesterday�s report, the Swiss economy is seen to shrink 1.7% during 2009 with a growth of 0.4% expected in 2010, better than the -0.4% initial estimate. The country�s labor market, though, will continue to be weak until 2010.
Meanwhile, Switzerland�s positive trade balance (trade surplus) narrows to 1.79 billion Swiss Francs in August from 2.21 billion Swiss Francs in the month prior. It was only seen to cool off to 2.03 billion Swiss Francs. The drop in trade balance was mainly caused by a huge slide in exports. Exports of Swiss watches have fallen by 22% to 843 million Swiss Francs in August.
Due to the broad-based bearish attitude on the USD, market participants still bought up the Swissy despite the dismal results of the two mentioned reports.
Switzerland�s economic calendar today is report-free. Today at 6:15 pm GMT, the US Fed will decide on its interest rate. The Fed is widely seen to leave its rate unchanged at 0.25%. With concerns regarding tight credit still looming, it is possible that the Fed will explore other means to chalk up liquidity. Any such action, or at least suggestion of it, would be bearish on the USD and consequently bullish on the �anti-dollars� like the CHF.
The USDCHF just bounced around a 75 pip range yesterday as traders ponder where to take the pair next. The pair has been consistently making new lows and if this keeps up 1.0000 seems like a very plausible target for CHF bulls.
No economic data coming out of Switzerland again today so the franc would most likely be driven by news from other major economies. That said, watch out for the US report on durable goods and the G20 meetings happening today and tomorrow as they could indirectly affect the behavior of the CHF versus other majors.
The Swissy got sliced up a little bit, as it lost out against the US dollar like most majors. The USDCHF pair closed yesterday at 1.0301, marking the second consecutive day it rose.
Swiss government officials decided to give the economy another boost yesterday, as parliament approved of a third economic stimulus package worth 330 million CHF. The program is intended to help the labor market, more specifically towards those who have been unemployed for a long time and young people who have no jobs.
Later today, we could see a sharp move in CHF trading as we SNB members Thomas Jordan and Vice-Chairman Philip Hildebrand will be talking at separate events today. Take note that the topic of Jordan�s speech is �Current Topics of the Swiss National Bank.� Like I said at the start of the week, I would be surprised if the strong appreciation of the franc isn�t one of those topics. Better be on the safe side and be aware that they will be delivering their speeches at 8:45 am GMT and 11:45 pm GMT.
The USDCHF seems to be doing a pretty good job holding on to its gains after “The Revenge of the Greenback” made its debut last week. Both US and Swiss economic schedules are filled with highly anticipated reports on their coming-soon list. Could the USDCHF push for more gains this week?
The Swissy and the Greenback have the entire Monday to warm up ahead of the week’s possibly volatile price action. No economic reports are due from both US and Switzerland but let’s not discount the fact that other news reports could cause some major shifts in risk sentiment…
On Tuesday, Switzerland releases their UBS consumption indicator at 6:00 am GMT. The reading stood at 0.77 in July and, if it posts an improvement for August, then we might see the Swissy put up a good fight and bring down the USDCHF. Still, CB consumer confidence data from the US could make for an exciting tug-of-war between the two currencies.
KOF economic barometer is on Wednesday’s agenda. The reading is projected to land in positive territory as it leaps from -0.04 in August to 0.35 in September. If the actual figure meets or beats the consensus, then that’s definitely good news for the Swissy! The indicator has been struggling to climb out of the negative territory in the past few months and almost made it out last month. The Swissy could chalk up a few more gains unless the ADP employment change in the US causes a strong USD rally.
Thursday has the SVME PMI on Switzerland’s schedule. The index is expected to stay above the 50.0 optimism mark as it climbs from 50.2 to 51.5. Friday is report-free for Switzerland but with the non-farm payrolls report on the US economic schedule, the action could get pretty chaotic for the currency pairs. Be careful out there!
The Swissy was one of those who bowed before the USD in yesterday�s price action. The USDCHF rallied and closed at 1.0336 from a 1.0266 opening.
No economic updates were held in both the US and Switzerland yesterday. The CHF declined and eventually handed back its gains versus the dollar from the previous week despite the broad-based buying in the US capitals markets.
Today, the UBS consumption indicator in August will be released at 6:00 am GMT. The index is used to measure the strength of domestic demand. An increase in the index indicates a rising consumer spending, which fuels economic growth. Previously, the index logged a score of 0.766, which is far below its long-term average of 1.5. Hence, any increase in the account could give the CHF some support.
The franc took another hit from the dollar in yesterday�s trading session as economic data came out worse than expected. The USDCHF pair opened the Asian trading session at 1.0333 and ended the US session at 1.0370.
The UBS consumption indicator which was released yesterday printed a reading of 0.66, indicating that recovery is not yet certain. Last month�s figure was a revised down figure of 0.75. The report predicts the direction of the economy by taking five economic indicators related consumer confidence, spending, vehicle sales, retail sales and tourism.
On today�s calendar, September�s KOF economic barometer is up for release at 9:30 am GMT. The report, which is also designed to predict the direction of the economy, is predicted to show 0.33. Last month, the report came out with a reading of -0.04.
�Swissy� Swissy� what you gonna do? What you gonna do when the SNB comes for you� Swissy� Swissy�� The CHF sold off against the USD and EUR yesterday, sparking speculation that once again, the SNB intervened.
Word on the street is that the SNB intervened in the markets as the CHF lost almost 150 pips against both of its major counterparts. The SNB would not directly say that they did implement currency intervention� but haven�t they said in the past that they would not let franc appreciate further? I don�t know about you but that sounds like an admission to me�
While such a move might be short lived for the USDCHF (given the USD�s weakness), it seems like the SNB is benchmarking the franc against the euro. Could the 1.5000 to 1.5100 price area now serve as a support area? I�ll be keeping an eye on this�
Earlier in the day, the KOF economic barometer rose to 0.85, the highest level since July of last year. It was only expected to rise to 0.33 after it had posted a -0.04 score for last month. This signals that the Swiss economy could be staring to recover.
Let�s see if the SVME PMI will be just as optimistic. The index � which rates the sentiment of purchasing managers on current business conditions � is expected to rise to 51.5, up from a reading of 50.2 the previous month.
The USDCHF edged even higher yesterday as the greenback was pumped up by risk aversion. Uncertainty ahead of the US NFP report and mixed economic data from the US raised doubts on the sustainability of an economic recovery, thus causing investors to flee back to the safety of the greenback.
Switzerland printed a better than expected SVME PMI reading for September. The index jumped from 50.2 to 54.3, beating the consensus at 51.5. However, the Kiwi was unable to hold on to its gains as the greenback rally proved to strong to subdue.
For today, no economic reports are due from Switzerland but the NFP report from the US poses an event risk for the USDCHF pair. Job losses are expected to have moderated in September but the US unemployment rate is projected to reach 9.8%.
Like the other currency pairs, the USDCHF was boxed within the 1.0400 to 1.0450 range for the most part of Friday. Surprisingly, the Swissy got a boost and the pair broke down from its range despite the dismal employment figures in the US.
No economic reports were released in Switzerland last Friday. The one that dictated the Swissy’s movement was the much awaited NFP report in the US. Based on the latest toll, US firms cut about 263,000 more jobs in September against the initial estimate of only 175,000. US’s unemployment rate, as an upshot, rose from 9.7% to 9.8%. In spite of these poor numbers, traders still dumped the USD for the other high yielding currencies like the CHF.
For this week, Switzerland will publish its CPI tomorrow (October 6). Inflation, as measured in the index, is seen to rise to 0.2% from 0.1%. Also, the country’s unemployment rate is due on September 7. Market participants expect it to rise to 4.1% from 4.0%.
Franc trading was particularly slow yesterday as it just bounced around a 50-pip range against the dollar. The USD/CHF pair closed the US session at 1.0319, only 10 pips lower from its Asian open.
No economic data released yesterday but expect to see Switzerland’s consumer price index for September today at 7:15 am GMT. The CPI, which measures the average change in price of consumer goods and services month-on-month, is the central bank’s primary tool to gauge inflation. The forecast is another increase in prices by 0.1%.
Watch out for the IMF meetings today also. If the IMF member nations start talking about currencies, we might see momentum in the markets pick-up.
The Swissy continued to edge higher against the USD, as the USDCHF pair closed at 1.0270. If USD weakness continues to persist, can the pair keep pushing lower?
Consumer prices remained steady in the past month, but still brought the year on year decline to 0.9%. Inflation hasn’t been much of a concern for the SNB, but if this trend continues, it would be something to take note of.
Later today at 5:45 am GMT, the Swiss unemployment rate will be released. It is projected that the rate rose from 4.0% in September to 4.1% this month. Unlike employment data from other countries however, the Swiss version normally doesn’t have that strong a market impact.
With nothing else coming out the rest of the week, I’d be on the lookout for other news coming out, more specifically that regarding corporate earnings. If earnings is seen to have improved in the past quarter, we may see risk appetite help carry the CHF to new highs against the dollar.
The Swissy gave back some of this week’s gains to the greenback as the USDCHF climbed from the 1.0250 area to a high of 1.0361 yesterday. Rising Swiss unemployment along with the greenback’s relief rally allowed the USDCHF to get back on its feet.
Switzerland’s unemployment rate rose from 4.0% to 4.1% in September. This came in line with economists’ expectations. The number of unemployed people stood at 154.4K, up by 3.6K from August.
The Swiss economic calendar is empty today, which means that the price movement of the USDCHF would be mostly affected by US economic data due today. The US has weekly unemployment claims and a speech by Fed Chairman Ben Bernanke on today’s economic agenda and we’ll just have to see where these would take the USDCHF pair.
It was the Euro and not the dollar that dictated the Swissy as it reflected the Euro’s volatile movement in yesterday’s action-packed trading. After making some sudden swings on both directions, the CHF finally closed yesterday on a higher note against the USD.
Switzerland’s calendar was report-free yesterday. Despite this, the CHF took a share of the EUR’s spotlight as it moved along with the EUR against the USD after the ECB decided to leave its interest rate unchanged at 1.00%. Much volatility was exhibited by both currencies following ECB President Jean-Claude Trichet’s statement that the bank is in no hurry to change its monetary policies.
The CHF, in the end, closed the day positively versus the greenback due to the persistence of risk appetite brought about by the better-than-expected unemployment claims in the US.
No economic reports are due today in Switzerland. The CHF could score another point against the greenback if risk tolerance remains in the US capitals markets. With the US trade deficit seen to expand to -$32.8 billion from -$32.0 billion, let’s see if the US could still mark its fifth straight gain.
The USD/CHF pair headed back to the 1.0330 when investors decided to take profits off some short dollar positions last Friday. It closed the week at 1.0327, just two measly pips lower from its week open at 1.0329.
This will be a light week for Switzerland in terms of data as only the high market impact economic release due is the retail sales report for the month of August. The consensus is that sales increased by 1.7%, higher than increase of 1.0% in July. If the report comes out with a positive reading, it would mark the third consecutive month of gain.
Watch out for data coming out of euro zone too as the price action of the EUR/USD tends to have an inverse correlation with the USD/CHF.
Up and down and up and down… As pointed out by my friend BigPippin, the USDCHF has been ranging as of late, with price action taking another dive yesterday. The CHF gained as dollar weakness continued, leaving the USDCHF pair to close the day at 1.0265.
No high impact reports are scheduled for release over the next couple of days, so watch out for developments in other countries. More specifically, I’d look out for earnings reports, as the results of these reports could either cause risk appetite to continue or for risk aversion to come back into play.
Also, keep in mind the that CHF made some headway against the EUR in yesterday’s trading. If the CHF makes strong gains against the EUR, I’ll be keeping my ears open for any rumors regarding SNB intervention.
After a slow warm-up during the Asian session, the USDCHF took a dive and hit an intraday low of 1.0193. Traders let go of the USD as FOMC member Donald Kohn hinted that the Fed is not ready to tighten their monetary policy just yet.
Switzerland’s economic calendar is empty for today but major reports from the US could cause some wild price action for the USDCHF pair. Retail sales data and minutes from the latest FOMC meeting are due and both could imply that economic recovery is slower than expected. The question is: Which would dominate price action today, risk sentiment or fundamentals? If both retail sales and FOMC minutes paint a grim picture of the US economy, risk aversion could cause a USD rally. But if traders focus on the weak fundamentals of the US, then they might dump the USD in exchange for currencies with better performing economies.
The Swissy reached a new yearly high against the USD as investors perked up their purchase of higher yielding assets, including currencies, given the encouraging US corporate and economic reports. The USDCHF pair marked a low of 1.0130 before closing at 1.0153.
No economic reports were due in Switzerland yesterday. As mentioned, the Swissy was primarily lifted by the upbeat economic and earnings reports in the US. Several big-time firms such as JPMorgan Chase and Intel plowed in some better-than-expected profits during the third quarter. US retail sales also logged some optimistic results with the core account posting a 0.5% over the 0.3% initial estimate. The USD was further pulled down versus the other majors like the CHF when some of the Fed members suggested that they are still open for an expansion of the central bank’s quantitative easing program to support the economy’s recovery.
Today, the ZEW Economic Expectations for the month of October will be due at 9:00 am GMT. Last month’s score was pegged at 58.0. With investor confidence dropping in Switzerland’s neighboring economies – Germany and the euro zone – it is also possible to see a similar decline for Switzerland. Such could halt the Swissy’s advance against the greenback for awhile.