Swiss franc news - page 19
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SNB's Jordan: Swiss franc is still significantly overvalued against the euro
Swiss National Bank governor Thomas Jordan in Swiss newspaper Tages-Anzeiger
Headlines via Reuters
USD/CHF Clears Resistance, Further Gains Likely
USD/CHF was little changed in early trading Wednesday, but eventually moved sharply higher as the dollar reacted positively to strong economic data. USD/CHF rallied to 1.01823, the highest level since early February. In today’s trading, the pair established a new high at 1.01917 and is currently off the highs at 1.0158, little changed from Wednesday’s North American close.
As a result of yesterday’s move to the upside, the pair decisively cleared the resistance at the March 9 spike high. The break above this resistance leaves the next target at the high established in late February at 1.02564. Given the ongoing bullish outlook for the dollar, an eventual move to this resistance is expected. And, not far above this level is key resistance at the November 2015 top at 1.0330. A breakout above this level would bolster the long term outlook for USD/CHF.
The dollar moved to a new rally high following the release of a stronger-than-expected US Durable Goods report. Durable goods orders for October surged past estimates, rising 4.8%, well above consensus expectations of a 1.5% monthly increase. The rise in durable orders was due to a 12% spike in transportation orders. In addition, new orders in September were revised up to 0.4% from -0.1%.
Excluding transportation, durable orders increased 1% in October, better than the consensus estimate of a 0.3% increase. This follows an unrevised 0.2% increase in September. Orders have increase in four of the last five month.
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USD/CHF Pulls Back Toward First Support
USD/CHF is lower in this morning’s trading, currently holding near the 1.0130 level, down 0.3%. In yesterday’s trading, the pair established a new high at 1.01917. However, heavily overbought conditions remain a factor. Therefore, a period of correction or consolidation appears warranted.
As a result of the recent gains, USD/CHF decisively cleared the resistance at the March 9 spike high. This level now represents first support now that the pair is pulling back. Holding this level of former resistance on a move to the downside would keep USD/CHF well-positioned to resume the upmove over the near term.
On the upside, the next target at the high established in late February at 1.02564. Given the ongoing bullish outlook for the dollar, an eventual move to this resistance is expected. And, not far above this level is key resistance at the November 2015 top at 1.0330. A breakout above this level would bolster the long term outlook for USD/CHF.
Recent strong economic data has boosted the potential for an interest rate increase at the December FOMC meeting. At present, fed fund futures are pricing in a 93.5% probability of a rate increase at the December meeting. And the minutes for the November FOMC meeting, which were released Wednesday, indicate a very strong commitment by the majority of members to increase rates at the December meeting.
The prospects for rising rates, as well as rising inflation under a Donald Trump administration, should help maintain a bid in the dollar, thereby driving USD/CHF to new highs on an longer term basis. Also suggesting the high probability of further strength in USD/CHF is the currently bullish technical condition.
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EUR/CHF: SNB Continues to Be in Whatever It Takes Mode; Where To Target?
For Switzerland’s currency, it remains all about limiting gains. As a result, look for the SNB to continue accumulating reserves in attempt to stomp out deflation fears.
An SNB official recently went so far as to say that the currency remains significantly overvalued, and that the central bank remains willing to intervene in currency markets as needed. While some have argued that negative interest rates are a sub-optimal monetary policy tool, it appears that the SNB still sees the benefits outweighing the costs.
So, unless pressure on the CHF abates, look for the current negative interest rate and foreign exchange intervention policies to prevail, keeping the currency around the 1.08 level versus the euro for the next couple of quarters.
SNB in the frame again as EURCHF rallies to 1.0800
Sharp rallies in CHF pairs this morning puts the SNB in the frame 30 Nov
USDCHF from 1.0130 to 1.0159 and EURCHF from 1.0770 to 1.0800 in a rush but sellers lurking. The CB may be have prompted by fears of euro weakness after this Sunday's Italian referendum
USDCHF back down to 1.0125 on a fresh wave of EUR buying as markets digest the latest reports from the OPEC meeting underway in Vienna.
Switzerland mftg PMI Nov 56.6 vs 54.4 exp
Switzerland November mftg PMI report 1 Dec
Also out:
Retail sales Oct yy -0.5% vs -2.2% exp vs -2.15 prev revised up from -2.2%
Swiss GDP Unchanged In Q3, Significantly Below Expectations
Swiss GDP was unchanged in the third quarter of 2016 following a 0.6% gain the previous quarter and was below market expectations of a 0.3% advance. The year-on-year advance was also lower than expected at 1.3% from 2.0% previously.
Consumer spending increased 0.1% for the quarter with a decline in spending on housing and energy. There was also a small decline in government spending for the quarter.
There was an increase of 0.5% in investment spending and there a recovery in construction spending following two successive quarterly declines.
There was a decline in exports of 0.2% for the quarter as imports advanced with the trade data having a negative overall impact on GDP.
There was another negative reading for the price deflator with prices declining 0.6% for the quarter, although the rate of decline did slow down and there was an increase in import prices. The data continues to suggest a slight underlying easing of deflationary pressures within the economy.
On the production side, the growth in value added was below the historical mean in most sectors and there will be further unease surrounding competitiveness issues with pressure to cut costs.
The data is disappointing, although it followed a notably robust second quarter and the data is also prone to upward revisions. There was no significant market reaction with EUR/CHF trapped below 1.0800.
source
CHF: SNB To Follow A Reactive Policy Vis-a-vis ECB: Where To Target?
We expect the SNB to follow a reactive policy vis-à-vis the ECB, implying that it will likely try to match further potential easing steps by the ECB.
The current low level of policy rates somewhat limits its room to manoeuvre, but more aggressive moves from the ECB would likely force the SNB to respond.
We therefore forecast EUR/CHF to be essentially flat on a 12-month horizon.
We maintain our forecast for EUR/CHF at 1.09, 1.09 and 1.10 in 3, 6 and 12 months, This implies USD/CHF at 1.01, 1.05 and 1.10.
source
Swiss November CPI Inflation Rate Dips To – 0.3%
Swiss consumer prices fell 0.2% in November compared with expectations of a 0.1% decline for the month and the 0.1% advance recorded for October.
There was an annual decline in prices of 0.3% compared with an annual decline of 0.2% for the previous month, which was also slightly weaker than expected.
There was a monthly decline in the prices for package tours and overnight hotel stays, which was slightly surprising given that demand held firm in the sector, with heating oil prices also lower on the month.
The weaker than expected inflation data will maintain concerns within the National Bank, especially as there has been a decline in the annual rate since the August reading of -0.1%. This will be particularly disappointing as the base effects have been favourable and there has been a negative annual inflation rate for the past 28 months. There is still scope for a gradual increase in the annual rate over the next few months with even more favourable base effects.
The National Bank will remain concerned over downside inflation risks given the persistent negative annual rate and will still be looking to curb franc gains in the short term. There is the potential for further intervention to cap currency gains.
There was no significant market reaction as EUR/CHF held below 1.0850.
source
What does the SNB know that the rest of us are just guessing at?
USDCHF and EURCHF ramped up in the past hour as we wait on ECB 8 Dec
A pre-emptive strike based on fact or just a case of "just in case" ? Either way I putting the SNB back in the dock as the countdown to ECB announcement and presser gets ever closer.
USDHCF has ramped up to 1.0078 from 1.0045 and EURCHF to 1.0881 which is helping to put a bid under EUR pairs generally.
So are the SNB looking for some bearish moves out of the ECB or, just like the rest of us, second-guessing?
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