Swiss franc news - page 7
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USD/CHF forecast for the week of August 3, 2015
The USD/CHF pair went back and forth during the course of the week, but the one thing that he did do was clear the 0.96 level. With that, we feel the buyers are going to continue to pushes market higher, probably heading towards the 0.98 handle given enough time. Above there, we should then head to the parity. The 0.95 level below is massively supportive as far as we can see, so at this point in time we don’t have any real interest in selling this particular market.
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USD/CHF: Buck Climbs Toward 4-Mth High on Factories' Day
The greenback marginally advanced against the Swiss franc amid muted trading activity on Monday, in sharp contrast with the significant down and up swing experienced on Friday in reaction to the record low US labor cost update for the second quarter of 2015.
Therefore, the USD/CHF maintained a relatively close position from which to test the four-month high at ₣0.9727 seen last Thursday. Moreover, the buck was still climbing in a steep uptrend, facing no significant technical obstacle until the psychological parity with the franc.
In the afternoon, the greenback advanced 0.17% to trade at ₣0.9688 against the franc, while the buck outperformed in general its major FX peers, as the US dollar index also increased, trading 0.30% elevated at 97.61 points.
Factories updates
The macro calendar dug in to a busy start of the new business week, with the most focus on the ISM manufacturing PMI, that stepped down from the six-month top booked previously. According to the fresh release, theISM manufacturing PMI hit 52.7 points in July, down from June's 53.5. Meanwhile, analysts had predicted a slightly better figure - an unchanged 53.5 points.
The less important factoryPMI from Markit moderately rose to 53.8 points in July, matching the market survey bet.
Additionally, personal income grew 0.4% in June matching the revised 0.4% rise a month ago, while personal spending reached 0.2%, a slowdown from the 0.7% expansion last month.
As for Swiss updates, Credit Suisse published its manufacturing PMI, showing a decline into the contraction area, as July's figure reached 48.7 points, falling from the 50.0 points booked in June.
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Swiss Deflation Spiral Deepens
Price growth in the Alpine country remained subdued in the seventh month of the year, according to the data from the Federal Statistics Office of Switzerland.
Measured month-on-month, the CPI showed a 0.6% decline in the reported period, after a meager 0.1% growth seen in the previous month. The figure was also worse than anticipated by the markets, which had forecast a 0.4% decline.
In annual terms, the costs of living in Switzerland declined 1.3%, even worse than June's 1% drop and continuing on the downward deflation spiral since November 2014.
The gauge measures the price changes seen in consumer goods and services, including transportation, food and medical care.
SNB rules out deflationary spiral
Back in June, Swiss National Bank Governor Thomas Jordan said he expects the Swiss economy to expand in the second half of the year in spite of the exchange rate shock that occurred after the Swiss franc's cap against the euro was removed.
Inflation will not stay below zero for long, Jordan also predicted. While it dropped well into negative territory, a sustained price decline is not to be expected, he pointed out.
"The SNB is projecting that momentum in the global economy will pick up again. This should cushion the impact of the exchange rate shock somewhat and allow Switzerland to return to positive growth in the second half of the year," Jordan said. "While inflation has dropped well into negative territory, as things currently stand a sustained price decline or indeed a deflationary spiral is not to be expected."
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SNB in the frame again as CHF weakens further
Swiss National Bank back in and smoothing the franc to fresh session lows as I mentioned in my order board post earlierUSDCHF in rampant mode from 0.9790 to 0.9841 and that's taken EURCHF through decent res/offers at 1.0700 to post 1.0723 so far.
Their recent attempts have been faded by traders but both pairs are posting higher lows and remain underpinned
Barclays Trade Of The Week: Buy USD/CHF
Barclays Capital nominate buying USD/CHF as their 'trade of the week', say it's a macro-technical driven trade.
"We think poor Swiss fundamentals continue to support CHF depreciation from still-overvalued levels. Even if concerns about Greece or China escalate, we think the CHF is likely to underperform higher-quality safe havens such as the USD," Barclays argues.
"Our technical strategist is also bearish CHF and expects further underperformance against the USD and EUR. The rising USDCHF trend of the past eight weeks points higher toward initial targets in the 0.9865/0.9905 area. A move above the latter would encourage our bullish view toward the 1.0130 March recovery high," Barclays projects.
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EUR/CHF breaks the post-crash high
EUR/CHF touches a session high of 1.0816EUR/CHF is higher for the fifth consecutive session and has edged through the February high of 1.0811.
There is talk of offers up to 1.0820.
The pair has climbed in 12 of the past 16 sessions in a three-week rally that kicked off as tensions in Greece were defused.
There has been plenty of talk about SNB intervention but a big factor is less worry about Europe, and even some optimism about the European economy.
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SNB rigging CHF like crazy
Switzerland ZEW investor sentiment Aug 5.9 vs -5.4 prev
Latest ZEW just out but not a price moveUSDCHF still near session lows at 0.9805 as EURCHF finds sellers
SNB still have a hand on the tiller
Why EUR/CHF has been rising - Deutsche Bank
EUR/CHF rallied for 6 straight days before today's pullbackReasons for the strength:
"The most likely explanations for the recent move appear to be either large one-off flows or unwind of safe-haven inflows triggered by the Greek crisis. With the latter out of the way, the risk reward for being short francs has certainly returned but may require imaginative risk management given thin market liquidity. Any evidence of domestic outflows would provide much greater confidence to enter the trade," Deutsche Bank writes.
Bottom line:
Short EUR/CHF or long USD/CHF
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EUR/CHF forecast for the week of August 17, 2015
The EUR/CHF pair initially broke above significant resistance during the course of the week, but it turned back around to form a shooting star. Nonetheless, we believe that there is quite a bit of bullish pressure underneath and down to the Swiss National Bank will continue to work against the value of the Swiss franc, especially in this market. With that being said, we believe that volatility is probably going to be the way going forward but also recognize that a break above the top of the shooting star would be a bullish sign that would have the market go much higher. We believe ultimately that this market should then go to the 1.20 level, which is where the Swiss National Bank recently had a currency peg to the Euro.
At this point in time, it could be very volatile on the way up, but every time this market pulls back you have to think that the marketplace will favor buying this market. Ultimately, we don’t have any real interest in selling because we see the entire area between 1.08 and 1.06 as being massively supportive. With that in mind, this is essentially a “buy only” market, but we do recognize that you may want to build your position up gradually. Starting out was small positions and adding to them as we go long. There is enough volatility but quite frankly if you jump “all in” right away, we could have quite a bit of backlash that could cause quite a bit of problems. Remember, sometimes it is a necessarily the position you have but the leverage that causes so many problems.
Although the shape of the candle is somewhat negative, the truth of the matter is that there are a lot of external forces at play in this particular currency pair. Ultimately, you have to think of this more or less as an investment, as the swap is positive to the upside as well. Ultimately, if you can hang onto a bit of volatility, you should be well rewarded by being bullish of this market.
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