The USDCHF looks like it has broken its long term downtrend line given the dollar’s strong rallies in the past couple of days. Though, yesterday it hit some resistance as it approached the 1.0300 mark.
Switzerland’s seasonally adjusted unemployment rate stood steady at 4.1% in November. While the unemployment rate may be a lagging indicator, it remains to be a key statistic of Switzerland’s economy. Consumer spending depends very much on people who work. Hence, a steady low rate somewhat reflects positively on Switzerland.
The Swissy gained following the report.
Much attention will be turned to Switzerland today with SNB’s interest rate decision at 8:30 am GMT. The SNB is seen to leave its interest rate unchanged at a record low of 0.25%. Some believe, however, that the bank may continue to make threats to intervene in the currency markets to fight the Swissy’s rise. But with Switzerland’s positive 3Q GDP and strong trade numbers plus the dollar’s recent appreciation, the possibility of such has lessened.
Will SNB Chairman Jean-Pierre Roth add fuel to the dollar’s rise? We’ll find out in a couple of hours.
The SNB’s interest rate decision proved to be uneventful for traders as the USDCHF traded in a tight 60 pip range yesterday. It open the Asian session at 1.0264 and ended the US trading session almost unchanged at 1.0261.
The SNB announced yesterday that they decided to keep rates steady at 0.25% for now. They said that inflation in the country have improved and would likely remain positive during 2010. The bank also reiterated their promise to make sure that the CHF’s value remains stable against the EUR… Which is just another way of saying “Ya’ll better not let the franc appreciate against the euro, else we gonna make ya regret it!”
No economic data coming out of Switzerland today so the USDCHF would probably be moved by news from other major economies, especially the euro zone.
The Swissy took some hits on Friday, as the USD gained for the third consecutive Friday. The USDCHF rose on some good data from the US, breaking past the 1.0300 handle and ending the week at 1.0341.
At 8:15 am GMT, the producer price index will be released. The index – which measures the change in the prices of goods and raw materials paid for by manufacturers – is expected to show a rise in prices by 0.2%. The report is an indicator of inflation, although its impact on the markets is minimal.
Tomorrow will be unusually busy for Swizterland, as three medium impact reports coming out. First, at 6:45 am GMT, the SECO economic forecasts report will be available. The report includes forecasts for all the major components of Switzerland’s GDP. Some of the components are consumption, investment, inflation and employment.
Later, at 8:15 am GMT, the quarterly industrial production report will be released. Growth in industrial production is estimated to have slowed down slightly, showing an increase of just 0.5%, down from the 2.7% rise the previous quarterly.
Lastly, and maybe most importantly, SNB Chairman Jean-Pierre Roth will be delivering a speech. Take note that as head of the central bank, traders hang on to every word he says as it could indicate what could be the next moves for the central bank. One thing I doubt will be on his agenda will be potential currency intervention, given how the CHF has weakened the past couple of weeks.
Whew! The Swissy was able to cap its losses yesterday as the price action cooled down for a bit. The USDCHF managed to keep its head under the 1.0350 level amidst the lack of top tier economic reports from the US.
Today’s price action could be much more exciting since the US has a jampacked economic schedule. Brace yourselves for the release of US PPI, core PPI, Empire State manufacturing index, TIC long-term purchases, and industrial production data. Yikes!
On top of that, Switzerland is set to report its SECO economic forecasts by 6:45 am GMT. This report would forecast the major components of the GDP, such as consumption and investment. It would also provide forecasts for inflation and employment figures. Better watch out for that!
The dollar has been rising over the Swissy for the past couple of weeks. It continued to do so again in yesterday’s trading. The USDCHF went as high as 1.0430 before closing at 1.0321.
Yesterday, the Swiss government upgraded its economic forecast for 2009 and 2010 due to the growing demand for the country’s exports. A strong 3.4% growth in its industrial production for the third quarter plus a rise in its November leading indicators support the government’s projection.
As mentioned, Switzerland’s industrial production grew by 3.4% versus the 0.4% consensus during the 3Q due to a pick-up in global demand as economies all over recover from the global recession. Production was, however, down by 9% on the year and 6.7% down on an annualized basis. So despite the better-than-expected third quarter figure, the Swissy still lagged behind the dollar.
No economic reports are due in Switzerland today. Be mindful, though, of some possible volatility coming from today’s US CPI release and FOMC statement.
The Swissy managed to retrace some of its losses in early in Asia yesterday but the FOMC rate statement late in the US session pushed it back near to its opening price.
No economic data came out of Switzerland yesterday but it has the ZEW Economic Expectations survey for December on its cupboard today. The survey basically gauges what investors, analysts and economists think about the economy using a optimistic/pessimistic scale. A reading higher than 0 means they were more optimists than pessimists. Expect to see the results of the survey at 10:00 am GMT.
The Swissy melted like cheese on bread as the USD carried the heat in yesterday’s trading sessions! The USDCHF rose to as high as 1.0508 before closing at 1.0471.
Released yesterday was the ZEW economic expectations index, which printed a slight decline. The index had a score of 54.0, down 2.4 points from November’s release. This indicates that while optimism is still high, it died down just a little bit in the past month. What I’m interested to see is how news from its European neighbors will affect franc trading. Take note, the EUR and CHF are highly correlated. If EUR weakness grows in the coming weeks, we could see the CHF take a hit as well.
With the US dollar’s seemingly unstoppable strength, the USDCHF climbed all the way up to the 1.0500 area last week. However, traders now seem to be more interested in the EURCHF’s behavior as the possibility of SNB intervention resurfaces.
The EURCHF pair has been tumbling down ever since Greece’s credit concerns hit the markets. As the holiday season dries up trading liquidity, increased volatility could push the pair further below the 1.5000 mark. Recall that the central bank intervened last March when the pair dipped to the 1.4900 area so tread carefully around those levels!
Today, the SNB will release its quarterly bulletin at 10:00 am GMT but this report is slated to have a minimal impact on CHF price action. A more high-impact event is tomorrow’s trade balance data, which could show that the surplus widened from 2.44 billion CHF to 2.79 billion CHF.
No other economic reports are due from Switzerland until the end of the week but be mindful of economic reports from the US which could make or break the USD rally.
The Swissy snapped its 3-day winning streak yesterday with a loss against the euro. But hey, it’s not Christmas everyday! So with the pair closing below the significant 1.5000 support, it is likely that this support-turned-resistance will hold given the lack of high impact economic reports for the rest of the year that could swing the euro upwards.
With the EURCHF falling below a significant level, a huge Swissy sell order that was made by a commercial bank spurred rumors that it was the SNB intervening in the markets. The SNB and the Bank for International Settlements, however, decline to comment. Since the USDCHF and EURCHF trading just below key technical resistances, it would probably take one more huge push or intervention to at least cap the Swissy’s potential rise.
Today (7:15 am GMT), Switzerland’s trade balance for the month of November will be published. The country’s trade balance is projected to expand to CHF2.79 billion from CHF2.44 billion. Generally, an advance in this account would be bullish for the Swissy. Given this potential gain, will somebody, perhaps the SNB, place a huge sell order on the Swissy again?
Just like the EUR, the CHF experienced a beating from the USD yesterday. From the looks of it, it won’t be long until the USDCHF tests last week’s high at 1.0508.
Switzerland’s trade balance yesterday failed to meet expectations. The report printed a 2.14 billion surplus in November, down the 2.44 billion surplus seen the month before and lower than the 2.79 billion surplus initially predicted. However, digging deeper into the report revealed that it was an increase in imports and not in exports that caused the surplus to narrow. In fact, exports grew, adding more evidence that the country’s export industry is starting to pick up.
No economic data is due for release today so expect the CHF’s price action to be primarily driven by news coming out of the Euro zone and the US. Still, given the low market liquidity, we could see a the CHF move sideways throughout the upcoming trading sessions.
The Swissy took advantage of the dollar, which got drunk after having a glass of bad new home sales data. The USDCHF broke out a recent ascending channel to close at 1.0389.
Tomorrow at 7:00 am GMT, the UBS Consumption Indicator index will be available. The index has been steadily rising the past few months – let’s see if the trend continues with today’s release. Also, the KOF Economic Barometer report is due on Wednesday at 10:30 am GMT. The index is based on 12 indicators and tries to predict the direction of the Swiss economy. It is expected to print a reading of 1.75, up from November’s release of 1.62.
I’m also watching the movements ofthe EURCHF. Take note that the pair has been trading at its lowest levels in 9 months… and what happened about 9 months ago? Ah yes, currency intervention by the SNB! If the CHF continues to strengthen, I wouldnt be surprised if we see a late Christmas gift from the SNB in the form of some intervention…
The Swissy managed to sneak in a few gains before 2009 came to a close, causing the USDCHF to tumble to the 1.0300 area. Both Switzerland and the US have some high-impact reports due this week so brace yourselves for the exciting price action ahead!
Switzerland will be releasing its SVME PMI report at 8:30 am GMT today. It could climb from 56.9 to 57.1 in December, enabling the Swissy to extend its gains. On Thursday, Switzerland’s CPI will be released at 8:15 am GMT. Price levels are expected to climb by 0.1% in December, following a 0.2% increase last November.
Come Friday, Switzerland will release its unemployment rate at 6:45 am GMT. The unemployment rate could climb from 4.1% to 4.2%, indicating that Switzerland’s labor market is still struggling to recover. Meanwhile, the US also has its share of employment data that day. The NFP report, due 1:30 pm GMT, could print a 10K net increase in employment, signaling that US labor conditions continue to improve. More USD buying, perhaps?
Just like the other anti-dollars, the Swissy managed to start 2010 positively. The USDCHF fell to as low as 1.0264 before closing at 1.0300.
Switzerland’s SVME PMI fell to 54.6 in December from 56.9 mainly due to a backlog of orders subcomponent. Still, the index remains to be above 50.0, indicating that Switzerland’s economy is still expanding. Despite the drop in the figure, the Swissy continued to route the dollar for the most part of yesterday’s trading action.
Switzerland’s economic calendar is report-free today. Though, the expected 2.3% drop in US pending home sales could be bearish for the CHF. The result will come out later at 3:00 pm GMT.
Taking a cue from the euro, the Swiss franc also succumbed to dollar buying yesterday. The USDCHF, from an intraday low of 1.0250, rose as high as 1.0361 before closing the US session at 1.0335.
Just like yesterday, Switzerland’s economic cupboard is empty today so expect the USDCHF’s price action to be primarily determined by news coming out of euro zone and the US. Most notably, watch out for the ADP non-farm employment change from the US at 1:15 pm GMT.
Eraser was the movie of the day for the USDCHF, as the franc erased all its losses versus the USD in yesterdays trade fest. The pair looked poised for new highs, before a run of risk appetite pushed the pair lower to close at 1.0277.
Consumer inflation data will be available today when the monthly CPI report is released at 8:15 am GMT. Consumer prices are expected to have risen by 0.1% from November to December. Still, don’t expect the report to have too much of an impact on the markets. Instead, pay attention to employment data that will be released from the US over the next couple of days. Given the reaction to last month’s employment reports, we could be in line for some volatile movement come Friday.
The Swissy lost against the greenback yesterday after Switzerland’s monthly CPI came in weaker than expected. Strong US employment figures also helped push the USDCHF to a high of 1.0372 during the US session.
Swiss CPI fell by 0.2% in December, against the consensus of a 0.1% uptick. Still, on an annualized basis, inflation picked up pace by 0.3% in December after remaining flat in the previous month. Meanwhile, the US weekly jobless claims came in stronger than expected, setting a USD-bullish tone ahead of the upcoming NFP report.
Later on, Switzerland will release its unemployment rate at 6:45 am GMT. The jobless rate is projected to climb from 4.1% to 4.2% in December, indicating that labor conditions in Switzerland have yet to improve. Of course, watch out for the release of the US NFP report at 1:30 pm GMT, keeping in mind the extra amount of volatility this could bring to the currency market.
The Swissy soared by about 150 pips following the release of the US NFP report. The USDCHF pair fell to a low of 1.0217 before closing slightly higher at 1.0233 in last Friday’s trading.
Firms in the US unexpectedly slashed about 85,000 payrolls in December, overshadowing the -3,000 estimate. November’s score, however, was revised up to 4,000 from -11,000. As mentioned, investors bought up the Swissy following the report.
Earlier that day, Switzerland’s unemployment rate was issued. The country’s unemployment rate rose to 4.2% in December, which is its highest level in 12 years. The total number of registered people who were unemployed rose by 8,790 to 172,740. Based on the latest data, Switzerland’s labor market has yet to improve despite the country’s third quarter economic recovery.
Switzerland’s unemployment account did not have much impact on the Swissy as the traders were probably positioning themselves ahead of the US NFP report which was going to be released after.
Today (8:15 am GMT), data on Switzerland’s retail sales will be due. Sales on the retail level are expected to have risen again by 1.9% y/y in November, lower than the 3.1% marked during the previous month. In any case, an increase in retail sales contributes to the country’s overall consumption. Such should reflect positively on Switzerland’s economy and the Swissy.
On January 15, Switzerland’s PPI for the month of December will be on tap. The price of goods and raw materials purchased by manufacturers probably rose by 0.2% during the period after coming in flat at 0.0% in November. A jump in PPI more often than not leads to an increase in inflation since a rise in input prices are usually transferred to the end users. Generally, a gain in PPI is bullish for the Swissy.
Given the above accounts, it’s possible for the Swissy to reach parity with the dollar once again this week.
Just like the euro, the Swiss franc was able to post significant gains against the dollar in yesterday’s trading session. It seemed that the frenzy caused by the poor results on the US NFP last Friday hadn’t faded yet, forcing currency traders hold on to their Swiss francs and continue selling the dollar.
An optimistic trade report from China also helped risk appetite improve, which boosted Swiss franc buying momentum. The trade report revealed that Chinese exports surged more than expected, marking the first increase in 14 months.
Switzerland’s retail sales report yesterday showed a growth of 0.6% y/y in November, lower than the 1.9% y/y increase initially expected. Despite the off-target figure, this marked the second consecutive month of gain which will help Switzerland’s economic recovery get some traction.
Switzerland’s economic cupboard is empty today so expect the USDCHF’s price action to be primarily driven by technicals and news coming out of euro zone and the US.
The Swissy gave up some of its gains versus the dollar yesterday but still managed to stay within range. The pair rose slightly to close the day at 1.0184, just 35 pips higher than its opening price.
With no data coming out from Switzerland today, we could see more range bound movement in CHF pairs. Watch out for any news that could shift sentiment. It is earnings season right now - if a US company posts spectacular gains, this could lead to increased risk appetite, which could benefit the CHF.
Lastly, I suggest that you take a look at the EURCHF pair. There seems to be some hesitation to bring the EURCHF pair any lower. Take note that the SNB looks at the price of the EURCHF in deciding whether or not the CHF is too strong. It seems that traders are hesitant to bring the CHF any higher in fears of currency intervention…
Taking advantage of US dollar weakness, the Swissy managed to pocket some gains yesterday. The USDCHF slid to a low of 1.0138 even though Switzerland didn’t have any economic catalyst in its schedule.
Today, Switzerland’s economic calendar is empty once again. However, the USDCHF could find some momentum to bust out of its current range after the US releases its retail sales report at 1:30 pm GMT. Although the consensus is a mere 0.3% uptick for December, many are expecting an upside surprise due to increased spending during the holidays.