The USDCHF has seen a significant tumble through short term trade, as an unexpected Fed 50bp rate cut leaves the dollar significantly weaker across the board. Yet renewed bullishness in equity markets may nonetheless keep the CHF on offer through short term trade, offering solid risk-reward on a USDCHF long position.
[B]Trading Tip - The USDCHF has seen a significant tumble through short term trade, as an unexpected Fed 50bp rate cut leaves the dollar significantly weaker across the board. Yet renewed bullishness in equity markets may nonetheless keep the CHF on offer through short term trade, offering solid risk-reward on a USDCHF long position. Our stops shall be kept tight on what we view as a shorter-term scalp, setting up a very solid risk-reward ratio through the coming days of trade. Event risk is relatively significant, but we nonetheless feel confident in our CHF-short position. [/B]
[B]Event Risk US and Switzerland[/B]
[B]US[/B] - The biggest event risk out the US has already passed now that the FOMC has enacted a sharper-than-expected rate cut. Given the enormity of the policy action, the US Dollar is unlikely to pay heed to economic indicators that are typically big market movers, such as CPI. Inflation pressures are anticipated to have eased during the month of August, led by weakness in gasoline prices and gains in food prices. However, if CPI is unexpectedly hot, the greenback could edge higher as the Fed cited in their policy statement that they are still concerned about inflation. The next day, the leading indicator index for August is estimated to fall 0.4 percent, which is unsurprising given the plunge in equities and dour housing data during the month. Nevertheless, this figure rarely sparks much in the way of price action.
[B]Switzerland[/B] - The Swiss franc faces mild event risk this week. First, the volatile adjusted real retail sales release should see a pickup in July amidst healthy domestic demand fueled by a tight labor market. The next day, the trade surplus for the month of August could ease back, as the balance during this particular period tends to be weak year to year. The same morning, producer and import prices are anticipated to edge lower as price growth remained tepid globally during the month of August.
[B]Data for September 19 - September 24[/B]
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[B]Data for September 19 - September 24[/B]
[B]Date[/B]
[B]US Economic Data[/B]
[B][/B]
[B]Date[/B]
[B]Swiss Economic Data[/B]
Sep 19
CPI (AUG)
Sep 19
Adj. Real Retail Sales (JUL)
Sep 20
Leading Indicators (AUG)
Sep 20
Trade Balance (AUG)
Sep 20
Producer and Import Price (AUG)