USD/CHF: There are Grounds for the Rise in the Pair. Fundamental Analysis of 05.05.2016
Although the pair USD/CHF has reached 8-month lows, it is advisable to be careful when opening short positions on the pair.
It happens that historically May is a favourable month for the USD. For eight months in 9 years USD index ICE grew in May. USD index ICE rebounded from the intraday lows of 91.91 on Tuesday and rapidly grew up. The rise from this support level may give ground for the further rise in the index.
Unexpected decline in the activity in the Chinese manufacturing sector may increase concern about the recovery of Chinese economy. Investors may reduce positions on assets in emerging markets and commodities and start to buy the USD again.
According to the Commission commodity futures trading, futures on the US Fed interest rates shows 13.1% probability of the interest rate increase in June. However, any improvement in the US economic data, especially on non-farm payroll in Friday, may force the US Fed to change positions on future monetary policy in the country, which will make investors buy the USD.
This week disappointing data on Swiss economy was released, which showed that SECO consumer confidence index in Q2 was -15 against the forecast of -12 and the previous value of -14). Consumer confidence index helps to evaluate inflations rate in the country.
On Monday Swiss Bank president Thomas Jordan said that negative rates and readiness of the Bank to carry out interventions in the currency market in order to weaken Swiss franc, provide support to the national economy. According to Mr. Jordan, franc remains significantly overvalued.
Attention of the market participants will be focused on the US labor market data, which will be released on Friday. It is expected that the number of new jobs outside agricultural sector will increase by 200 000, unemployment rate will remain at the previous level of 5%. According to some forecasts unemployment rate will fall to 4.9%.
Previous report has shown that new jobs are increasing rapidly (+215 000). If the data in the new report will coincide with the forecast or will exceed the forecast, the USD will grow.