USD/CHF: Swiss Index of Economic Expectations has Grown
Swiss index of economic expectations has grown to 11.5 in April against 2.5 in March. However, this news has had only short-term effect on the market. It is likely that traders’ activity will be low today in advance of the meeting of the ECB and the interest rate decision (Thursday, 13:45 GMT+2). Press-conference of Mario Draghi, the head of the ECN will be held after the meeting at 14:30.
Note that in December the rise in Euro and in the pair EUR/USD was caused by the decision on expansion of EQ program in the EU. Tomorrow’s decisions of the bank and press-conference by Mario Draghi will be important for investors and traders as they will affect not only movement in Euro but the entire financial market. Note also that inverse correlation in the pairs EUR/USD and USD/CHF is close to 95%. Movement in the pairs is often mirrored.
Judging by the statements by the US Fed representatives, next increase in the interest rate in the USA will not take place before June.
Nevertheless, the US Fed does not deny possibility of gradual monetary policy tightening.
On the other hand, CNB believes that Franc is still overvalued and in needed the bank can carry out intervention in the financial market. The rate on deposits is -0.75%.
These facts will prevent the rise in Franc and the decline in the pair USD/CHF.
