Swiss franc news - page 8
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SNB back in the frame as CHF pairs rise rapidly
A rapid weakening of the swiss franc just prior to 07.00 GMT saw CHF pairs jump and eyes turn to the central bank
They've been frequently seen in "smoothing" operations in the past few months and have readily acknowledged that they will intervene when necessary
Yesterday's meltdown and flight to safety, with USDCHF falling to 0.9260, will have had them in anxious mode and this morning's move higher in the euro after the early wobble will have given them added momentum so their presence can not be ruled out. Equity market stabilisation will have helped the move too of course
USDCHF jumped from 0.9320 to 0.9430 before running into more offers that I highlighted on the order-board. Currently back down to 0.9390
EURCHF rallied to 1.0880 from 1.0785 before also settling back lower around 1.0845 as I type
Expect more demand in the dips but there's still plenty of CHF wanted out there too
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USD/CHF: USD Bulls Back in Drivers Seat
The US dollar is enjoying a rally on the wave of improved risk sentiment, which continues to spread from Asia to Europe, after Chinese intervention calmed global markets.
Following two days of extreme volatility, renewed sentiment shifts attention from safe havens such as the yen, the euro and the swiss franc back to US dollar.
The USD/CHF added 0.37% to ₣0.9421 following the European open, bouncing off 2-month lows seen at the beginning of the week.
Although the overall sentiment improved following thePeople's Bank of China (PBoC)'s intervention, investors remain cautious as the US volatility index (VIX) is at 36%, double the year average.
The afternoon US session will get back in focus, as New York Fed President William Dudley's speech is due.
"Dudley's views will be scrutinized by the market, and given the recent change in language last week from Dennis Lockhart, it's hard to get a sense of whether he is going to give an indication of a September hike," Chris Weston from IG wrote on Wednesday.
At Jackson Hole later, Dudley, and his colleague Stanley Fischer could provide a catalyst for better days for USD bulls, as markets will be given a chance to see the world through the eyes of the Fed.
Moreover, following recent improvement on the US macro front, attention will also go to US durable goods orders for July, also due in the afternoon session.
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Swiss Q2 GDP positive ... avoids a recession. Solid private and government sending
Swiss GDP for Q2 was out earlier:+0.2% q/q and +1.2% y/y
The positive q/q means, of course, Switzerland has avoided a recession (if you define one as 2 consecutive quarters of negative growth)
Both the
helped make up for a small fall in Swiss exports (down 0.2% on the quarter)
Subdued growth in Switzerland has been expected since the CHF soared following the SNB's removal of the cap back in January.
The CHF strengthened but has since bounced back a little:
EUR/CHF forecast for the week of August 31, 2015
The EUR/CHF pair tried to rally during the course of the week but found far too much in the way of resistance above the 1.08 handle. By doing so, we ended up forming a shooting star. Over the previous three weeks, we have seen a shooting star, a hammer, and then finally another shooting star. This tells us that the market is going to continue to be very tight at this moment, but we do think that there is a proclivity to go higher given enough time. Above the 1.09 level, we would be willing to start going long with a small position.
USD/CHF: Short-Term Levels To Watch
Last week was characteristically quiet and lackluster in global markets, with the US dollar edging slightly higher as traders tried to soak up the last of the late summer sun.
Just kidding.
The dollar did manage to gain ground across the board, but only after Monday’s precipitous drop. In fact, volatility across the foreign exchange market (and other markets more broadly) was as high last week as it has been at any point since the Great Financial Crisis. Taking a step back to survey the damage, the US dollar has been one of the primary beneficiaries, though the dollar index still remains generally range-bound between 94.00 and 98.00.
Zooming in to a specific component of the dollar index, namely USD/CHF, reveals a more nuanced picture. After collapsing down to its 78.6% Fibonacci retracement at .9300 last Monday, the pair staged a sharp recovery rally back to the mid-.9600s as of writing. Not surprisingly, both the daily RSI and MACD indicators have shown signs of recovering along with the exchange rate itself: the RSI is back at a neutral level at 50 after a brief dalliance in oversold territory, while the MACD shows signs of turning higher to cross back above both the “0” level and its signal line, which would herald the return of bullish momentum.
In the short-term, there are two key levels to watch. The 61.8% Fibonacci retracement of the mid-August drop sits at .9655 and put a cap on USD/CHF late last week, whereas the 50-day MA at .9575 could provide near-term support. Given the recent surge and tight consolidation near the highs, an upside breakout appears more likely, with a close above .9660 potentially opening the door for a rally to 97.60 (the 78.6% retracement) or .9900 (the 5-month high). On the other hand, a break below 50-day MA support could expose .9500 or lower later this week.
This week’s data-packed economic calendar, including global PMI figures, US ADP employment and of course, Friday’s marquee NFP report, will no doubt have a major influence on USD/CHF and all dollar-based pairs, so readers should keep a wary eye on their data feeds as we move through the week.
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USD/CHF: Dollar Bids Increase Ahead of NFP
The US dollar hovered near two-week highs against the Swiss franc on Friday, ahead of the highly anticipated US non-farm payrolls data.
The Swiss domestic economy failed to provide support for the currency, as the negative growth of consumer prices worsened in August. Swiss deflation extended its pace of growth in eighth month of the year, booking a 0.2% decrease on a monthly basis, while annually the gauge declined 1.4%.
The USD/CHF was supported by increased demand for the greenback, up 0.16% to ₣0.9742.
The pair is expected to receive more direction in the afternoon, after US non-farm payrolls are released. The figure is even more important this time around as it is likely to provide a hint to the Federal Reserve's (Fed) rate hike intentions.
"Interest rate markets are currently pricing in a 30% probability of a September hike in interest rates from the Federal Reserve, 42% for October and 57% for December," Chris Weston from IG wrote on Friday.
Market expectation is that 217,000 jobs were added in August, while the unemployment rate is expected to tick down to 5.2%, moving into the Fed’s full employment target. Average hourly earnings, year-on-year, are expected to increase a modest 2.1%.
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SNB total sight deposits CHF 463.92 vs CHF 463.88bn prior
Latest sight deposit data from the SNB to 4th September 2015
EUR/CHF rises to highest since the floor broke, what's next
EUR/CHF rises to highest since Jan 14
The SNB yanking the floor in EUR/CHF remains the defining FX story of 2015 but the theme that has emerged over the past two months is a persistent bid in the pair.
EUR/CHF rose to 1.0969 today, breaking the August 11 high.
Last Wednesday, laid out a trade idea for EUR/CHF, suggesting to buy a dip to 1.0812 for an eventual test of the August high.
Lately, the theme in this pair has been a steady bid in European trading that ebbs in North America and Europe. The high today came shortly after Europe went home in what looks like a run on stops.
The thinking is that the SNB must be on the bid but yesterday's FX reserve data didn't show any fresh activity. Could they be using another channel?
Whatever is happening in EUR/CHF the pair has managed to brush aside a dovish ECB and the round of China/Fed-related risk aversion.
If you have a fundamental approach, it's a tough trade because there is no theme driving it other than the will of the SNB. But if you're satisfied with seeing a chart that in a steady uptrend with virtually no resistance ahead, then this is as good as it gets.
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USD/CHF: Franc Shows Resistance, Defends Route to Parity
The greenback was seen modestly in negative territory on Wednesday, after the USD/CHF experienced volatile trading sessions today.
Initially, the buck aimed for a fresh four-month high, followed by a sudden drop during the European market hours amid the ongoing debate with rather unfavorable odds for a September rate hike in the US.
''The Fed will stand pat next week for the following reasons, starting with the fact that the global equity markets are fragile. In the US, for example, the S&P 500 declined 11% over a six-day span last month, which is twice the normal amount of adjustment that has historically occurred before the initiation of an increase in the fed funds rate; equity market volatility also remains elevated,'' Deutsche Bank analyst Joseph LaVorgna mentioned.
Looking at the daily chart, the pair remained locked in a steep uptrend, bouncing from its two-month bottom seen at ₣0.9250 on August 24. Meanwhile, the buck received support amid mounting foreign reserves of the Swiss National Bank (SNB) according to the latest release. However, the parity goal managed to resist, after being last seen at the beginning of March.
In the afternoon, the greenback gave up 0.48% to trade at ₣0.9742 against the franc, falling from an intraday high at ₣0.9823 early in the morning, while the US dollar index added 0.16% to 96.00 points.
Record JOLTS
The Bureau of Labor Statistics posted the Job Openings and Labor Turnover Survey(JOLTS) reaching 5.753 million in July, beating the anticipated figure of 5.30 million job openings, after June's 5.24 million.
Meanwhile, World Bank Chief Economist Kaushik Basu stated that the Fed should put the planned rate hike on hold until the global economy is more stable, because a lift-off would cause "panic and turmoil".
Apart from the macro updates, investors digested news that China's Ministry of Finance would roll out more forceful fiscal policy to boost the slowing economic growth in the country, including investment in major construction projects.
Moreover, officials also announced some income tax changes to dividends in order to encourage long-term investment in Chinese shares.
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EUR/CHF: Cross at 8-Mth Highs, Trades Above ₣1.10
The franc has been gradually weakening during the previous weeks as investors were pushed out of the negatively yielding franc and were rather buying the euro, or other higher yielding currencies.
Therefore, the cross rose to eight month highs on Friday, or levels unseen since the crash on January 15, and was trading 0.33% higher, breaking the psychological level of ₣1.10. This resistance might cause some problems for bulls and some consolidation is likely.
As the latest data from the euro zone were not so negative and GDP for Q2 surprised positively, some confidence returned to the currency markets and traders bought the EUR/CHF cross in anticipation of further appreciation.
"Earlier in the week the German data were only so-so, but yesterday Spain managed to beat the already-high expectations, seeing its production levels increase at a staggering annual rate of 5.2%. This was the fastest pace in 15 years," analysts at Rabobank said on Friday.
However, inflation in the euro zone remains dismal, and the latest appreciation of the euro against most of the major peers made the European Central Bank (ECB) uncomfortable. Therefore, a further sustainable rise of the EUR/CHF cross remains unlikely as the ECB will probably act to weaken the single currency.
The Swiss National Bank, on the other hand, failed to depreciate the franc and none of the steps it made in the previous years helped, which led to multi year highs for the franc earlier this year.
The German CPI for August decreased from 0.2% to 0.0% month-on-month, while the yearly change stayed at 0.2% in August, the German federal statistics office advised on Friday. This only confirmed that inflation is not rising and is rather stagnating, which might lead to further ECB trash talking of the euro.
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