Swissie flat, KOF index, retail sales ahead

The currency market is in quiet mode on Friday, and USD/CHF is showing limited movement. In the European session, the pair is trading at 0.9076, up 011% on the day.

Switzerland published only one event this week, but it was an impressive release. Credit Suisse Economic Expectations, which asks institutional investors to rate the economic outlook six months out, jumped to 30.0 in October, after a weak reading of just 2.6 points beforehand. A release above the zero level indicates optimism, so investors are clearly feeling more optimistic about the Swiss economy.

KOF Economic Barometer expected to fall

The markets will get a look at Swiss numbers early Monday, with the release of retail sales (7:30 GMT) and the KOF Economic Barometer (8:00 GMT).

The KOF Economic Barometer, which is composed of over 200 indicators, hit a 10-year high in September, when it rose from 110.2 to 113.8 points. However, the index, which projects the country’s economic health over the next six months fell considerably in October, to 106.6 points. The downturn is expected to continue in November, with a forecast of 101.0 points. Retail sales slowed significantly in September, with a small gain of 0.3%, down from 2.5% beforehand. This marked a 5-month low, as consumers held back on purchases.

These two releases point to a deterioration in economic conditions, in what will be a year to forget. Switzerland’s GDP is projected to fall by 3.8% in 2020 and inflation is expected to dip into negative territory, with an estimate of -0.7 per cent. If the upcoming KOF index and retail sales are soft, the Swiss franc could come under pressure.

USD/CHF Technical

  • USD/CHF faces resistance at 0.9145. The next resistance line is 0.9180
  • The pair is testing support at 0.9081, followed by support at 0.9052
  • USD/CHF broke below the 20-day MA earlier in the week, which indicates a downtrend

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.

Kenny Fisher

Kenny Fisher

Currency Analyst at Market Pulse
Kenny Fisher joined OANDA in 2012 as a Currency Analyst. Kenny writes a daily column about current economic and political developments affecting the major currency pairs, with a focus on fundamental analysis. Kenny began his career in forex at Bendix Foreign Exchange in Toronto, where he worked as a Corporate Account Manager for over seven years.