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Swissie dips as KOF Barometer slides

The Swiss franc has lost ground in the Monday session. USD/CHF is currently trading at 0.9159, up o.52%. The Swissie has rebounded after a losing week, the first in a month.

KOF Economic Barometer 

In Switzerland, the well-respected KOF Economic Barometer fell for a third successive month. The index slowed to 113.5 in August well of the consensus 126.3 and below the July reading of 130.9. Still, it should be remembered that the May reading of 143.2 marked an all-time high and the index remains comfortably above the long-term average of 100. If the slowdown continues in the upcoming months, however, sentiment towards the Swiss franc could weaken.

The markets will be keeping an eye on Thursday, with three Swiss releases on the calendar. GDP for Q1 is expected to rebound at 2.0% (QoQ), after a read of -0.5% in the first quarter. We’ll also get a look at CPI and Retail Sales, so I expect the Swiss franc to be busy on Thursday.

Risk sentiment has risen after Fed Chair Jerome Powell’s Jackson Hole speech on Friday. Powell’s highly-anticipated remarks didn’t really surprise the markets, with the Fed Chair reiterating that the Fed would likely begin tapering before the end of the year. At the same time, Powell said that rate hikes were not imminent, as the economy still had “much room to cover” before full employment was achieved.

The next key date for investors to circle on their calendars is September 22, when the Fed holds its next policy meeting. Fed officials have been hinting that a timeline for tapering could be announced on that date. However, the timing of a rate hike is less clear. In his speech, Powell reiterated that there was no link between tapering and a rate hike. Still, the announcement of a taper is likely to raise speculation about a rate hike and would be a bullish event for the US dollar.

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USD/CHF Technical

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Kenny Fisher

Kenny Fisher [6]

Market Analyst at OANDA [7]
A highly experienced financial market analyst with a focus on fundamental analysis, Kenneth Fisher’s daily commentary covers a broad range of markets including forex, equities and commodities. His work has been published in several major online financial publications including Investing.com, Seeking Alpha and FXStreet. Based in Israel, Kenny has been a MarketPulse contributor since 2012.
Kenny Fisher

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