At the Forex currency market Swiss Franc rate is moving away from historic highs on Monday, however it is still quite strong.
Forex forecast: MACD indicator is in the negative area for the pair USD/CHF and started to go down, forming a pair sell signal; while volumes remain average. Stochastic Oscillator has come into the oversold zone, giving a pair sell signal.
Forex recommendations: in case of breakdown at the level of 0.8510, the pair USD/CHF will go to 0.8480 and to new lows of 0.8465. If downward breakdown does not take place, the pair will consolidate close to the current levels.
Index of leading indicators KOF in Switzerland rose to 2.30 points in May against the forecast of growth by 2.22 points.
New week will be eventful in terms of CHF news: Swiss GDP in QI will become known on Tuesday, the data on retail sales and PMI will be released on Wednesday.
In general the situation in Swiss economy has not changed fundamentally.
The head of the National Bank of Switzerland, Mr. Hildebrand noted that strong and expensive Franc undermines exports and disrupts tourism industry; therefore negative impact of the CHF could be worse than predicted. â€œWe intend to take any measures to achieve price stabilityâ€ stressed the monetary politician. According to him, downside risks to recovery are still preserved, although economy demonstrates steadier growth rate than previously expected. It was worth noting Hildebrandâ€™s statement that expansionary monetary policy constitutes a menace to a number of industrial sectors in the long term.
Julius Baer Group believes that it is not clear yet whether Swiss economy requires the increase in theÂ Â interest rate or not: â€œany rise will have an impact on the economy as a whole for a yearâ€. However it is quite possible that local economy and its recovery process are strong enough to cope with the interest rate rise to 1%-1.5%.
Note that real effective exchange rate of the Franc grew by 10% last year.
As it was made public earlier the level of trade balance in Switzerland rose by 1.52 billion in April against the rise of 1.0 billion in March. In addition, exports in Switzerland increased by 7.9% in April against the fall by 3.1% in March.
It became known earlier that index of investorsâ€™ economic expectations ZEW in May fell by 20.3 points in May, to the level of -11.5 points against the previous level of 8.8 points. Due to such background, a number of those who expected the increase of the interest rate in the next quarter have dropped sharply.
However, economists do not assess Swiss economic situation as negative, on the contrary, it is described as â€œgoodâ€ (majority -68.6% of respondents think so). The share of those, who expect the rise in inflation in the near future, has fallen to 51.4% (-25.1%).
Swiss National Bank is going to discuss monetary policy issues on 16 June.