EUR/CHF Forecast January 17, 2012, Fundamental Analysis
The EUR/CHF pair moved in line with the relief rally seen in the market yesterday, where the pair gained momentum after the euro started to recover some of the losses incurred on Friday on comments from European leaders that the several downgrades will push them to act quickly and finalize the plans needed to fight back the debt crisis and prevent the contagion from spreading more.
Today, the pair is expected to be volatile and to fluctuate heavily ahead of the several critical bond auctions and ahead of the important data awaited from the euro-area region, which is to release confidence and inflation data.
We also should pay attention that the EUR/CHF is approaching areas of 1.2000, which is the lowest trading level for the euro against the Swiss franc, as the Swiss National Bank clarified before that it is ready to do whatever to prevent the pair from falling below this level, where the strong franc hurts the exports and the economy in general.
The euro area will start the data at 10:00 GMT with the December inflation figures, where the CPI index is expected with 0.4% rise on the month after 0.1% gain and on the year to confirm the flash estimate and fall to 2.8% from 3.0% while core CPI inflation to hold at 1.6%.
At the same time we have the ZEW Economic Sentiment for January to see if there is any improvement from December’s -54.1.
Germany will also release the ZEW Survey for January at 10:00 GMT as the Current Situation index is expected to fall to 24.5 from 26.8 while the Economic Sentiment Index is expected to improve to -49.8 from -53.8.
Auctions:
09:30 GMT Spain sells bills
10:00 GMT Greece sells bills
10:30 GMT Belgium sells bills
Originally posted here
