The Swiss franc is in negative territory for a second straight day. In the European session, USD/CHF is trading at 0.9975, up an impressive 0.69% on the day.
Swissie weakens on KOF barometer
The KOF Economic Barometer decreased in October to 90.9, down from 92.3 in September. This marked the sixth successive month that the index has been below the long-term average of 100. The primary driver of the downturn was manufacturing, which has been hurt by sluggish global demand. The economic outlook for the Swiss economy remains gloomy.
Despite weak risk appetite on the global scene, the safe-haven Swissie has been unable to capitalize and attract nervous investors. USD/CHF has been on a steady upswing since mid-September and briefly pushed above the symbolic parity line on October 21st.
We’ll get a look at Switzerland’s inflation report next week. Inflation has been rising in Switzerland, which forced the Swiss National Bank to raise interest rates by a massive 0.75% in September. This raised the cash rate to 0.50%, ending the era of negative rates. Still, inflation is much lower than in the Eurozone or the UK. Headline CPI is expected to tick lower to 3.2%, down from 3.3% in September.
In the US, Personal Spending gained 0.6%, as consumer spending was higher despite stubbornly high inflation. Core PCE, the Fed’s favorite inflation gauge, remained unchanged at 0.5% MoM. On an annualized basis, the index rose 5.1%, up from 4.9% and just below the consensus of 5.2%. The data is unlikely to change expectations of a 0.75% rate hike from the Fed next week.
.
USD/CHF Technical
This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.
MarketPulse provides up-to-the-minute analysis on forex, commodities and indices from around the world.