The Swiss franc has posted slight losses for a third successive day. In European trade, USD/CHF is trading at 0.9228, up 0.19% on the day.
KOF barometer declines
Switzerland released key economic barometers on Wednesday and the readings showed a de-acceleration in economic activity and expectations. The KoF Economic Barometer slipped to 133.4 in June, down from 143.7 in May and well below the consensus of 144.7. Despite the corrective move, the barometer remains well above its long-term average, and one should keep in mind that the May reading was an all-time high. There wasn’t any relief from ZEW Economic Expectations, a survey of market experts of the economic outlook for the next six months. The indicator showed a sharp slowdown, falling from 72.2 to 51.3 points. This marked its lowest level in five months.
Are these readings a sign that the Swiss franc is in trouble? The markets don’t appear to be all that concerned, with the Swissie sustaining only slight losses today. Both indicators remain very high, despite slowing down. The outlook for the Swiss economy remains very positive, provided that the country is not severely affected by a resurgence of Covid-19.
Inflation levels remain subdued in Switzerland. We’ll get a look at CPI for June on Thursday. The consensus is for 0.2% MoM and 0.7% YoY, little changed from the May numbers. The Swiss National Bank (SNB) has an inflation target of 2%, and with inflation hovering well below this level, has no plans to tighten policy. Currently, interest rates are at the ultra-low level of -0.75%, as the SNB wants to keep the Swiss franc at low levels in order to keep exports competitive.
- USD/CHF continues to test resistance at 0.9223. Above, there is resistance at 0.9277
- On the downside, there is support at 0.9129. This is followed by support at 0.9089
For a look at all of today’s economic events, check out our economic calendar. www.marketpulse.com/economic-event 
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