The Swiss Franc like most major currencies fell against the greenback as falling oil prices and declining economies in Europe and Asia led to broad based Bullish dollar sentiment. There lies some technical resistance ahead for the USDCHF at the 1.0864 price level of the 61.8% Fibl level of the 1.1626 – 0.9641, which may be the only speed bump for the pair.
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Swiss Franc Tumbles On Dollar Strength And Risk Appetite
Fundamental Outlook for Swiss Franc: Bearish[/B]
- Swiss Unemployment Fell in July keeping the jobless rate at 2.5% As Increased Asian Demand Spurred Hiring.
- SVME-PMI fell to the Lowest Level In Three Years in July With A Reading of 54.1 From 54.9 the Month Prior.
The Swiss Franc like most major currencies fell against the greenback as falling oil prices and declining economies in Europe and Asia led to broad based Bullish dollar sentiment. Crude falling below the technical significant $120 level sparked risk appetite and dollar strength which had the Fran trading heavy early in the week. However, it was President Trichet’s hawkish comments that would send the Franc up nearly 500 points.
Oil now trading below $118 a barrel has led to a month long slump in commodities. Declining raw material and gasoline costs have increased the profit out look for retailers and fueled risk appetite, which will continue to weigh on the Franc. Also, the fundamental picture in Switzerland is expected to decline further as the SECO Consumer Climate indicator is anticipated to fall to -4, which would the first negative reading since October 2005. The slowing growth in the economy and the anticipated effects of the U.S. credit crisis has dampened sentiment, which could see domestic growth fall. Swiss consumer have remained resilient with retail sales increasing 9.4% in May, but declining confidence could lead to shoppers tightening their wallets. There lies some technical resistance ahead for the USDCHF at the 1.0864 price level of the 61.8% Fibl level of the 1.1626 – 0.9641, which may be the only speed bump for the pair. - JR
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