By FXEmpire.com
EUR/CHF Weekly Fundamental Analysis April 23-27, 2012, Forecast
Introduction: News from the Euro and Swiss zone. EUR/CHF is frequently chosen for carry trades which involves going long a high-yielding currency (EURO – 3.50%) against a low-yielding one (CHF – 1.50%). Traders earn daily interest fees when holding this pair long (rollover fees).
- The interest rate differential between the European Bank(ECB) and the Swiss National Bank(SNB)
- Swiss and Euro zone fundamentals
Analysis and Recommendations:
The EUR/CHF is trading at 1.2017. The week was a battle between the markets and the line drawn in the sand by the SNB. The pair stayed in a tight range between 1.2034 and 1.2014
European markets traded on a positive note today on the back of unexpectedly rise in German business confidence. Asian markets traded on a mixed note and US stock futures are trading in the green territory. G-20 meeting continued for the second day today and has advised European nations to fix its debt crisis which is prolonging since past two years and still threatens the global growth. German Ifo Business Climate unexpectedly rose to 109.9-mark in April from previous level of 109.8 in the last month. German Producer Price Index (PPI) increased to 0.6 percent in March as against a previous rise of 0.4 percent in February. Economic data from UK indicated that, the country’s retail sales rose by 1.8 percent in March compared to previous decline of 0.8 percent in February.
The European Union has no plans to activate its bailout funds to recapitalize Spanish banks, a European Commission spokesman said Thursday in Brussels, according to news reports. “There is no plan to activate the EFSF
France sold 7.97 billion euros ($10.5 billion) of government bonds Thursday, news reports said, near the top end of its planned range of 7 billion to 8 billion euros. France’s debt agency sold 3.55 billion euros of 2014 notes at a yield of 0.85%, while a sale of 2.7 billion euros of 2017 notes produced a yield of 1.83%, reports said. A sale of 1.73 billion euros of April 2015 bonds produced a 1.06% yield.
Traders and analysts said unspecified rumors of a possible downgrade of France’s sovereign debt rating triggered a sharp selloff in French government bonds and added to losses for peripheral euro-zone bonds Thursday morning.
Spain’s economy is back in recession after a mild recovery in early and mid-2011, and faces an “exceptional” situation that may led to further increases in unemployment, Bank of Spain Governor Miguel Angel Fernandez Ordonez said Tuesday.
Major Economic Events for the past week actual v. forecast
|
USD |
Retail Sales (MoM) |
0.8% |
0.3% |
1.0% |
|
USD |
Core Retail Sales (MoM) |
0.8% |
0.6% |
0.9% |
|
AUD |
Monetary Policy Meeting Minutes |
|||
|
EUR |
ECB President Draghi Speaks |
|||
|
Interest Rate Decision |
1.00% |
1.00% |
1.00% |
|
|
GBP |
MPC Meeting Minutes |
|||
|
GBP |
Claimant Count Change |
3.6K |
7.0K |
4.5K |
|
CAD |
BoC Monetary Policy Report |
|||
|
USD |
Initial Jobless Claims |
386K |
370K |
388K |
|
USD |
Existing Home Sales |
4.48M |
4.62M |
4.60M |
|
GBP |
Retail Sales (MoM) |
1.8% |
0.5% |
-0.8% |
|
GBP |
Retail Sales (YoY) |
3.3% |
1.4% |
1.0% |
|
CAD |
Core CPI (MoM) |
0.3% |
0.4% |
Historical
Highest: 1.5193 CHF on 10 Oct 2009.
Average: 1.3271 CHF over this period.
Lowest: 1.026 CHF on 10 Aug 2011.
Economic Highlights of the coming week that affect the Euro, GBP, and Franc
|
EUR |
Industrial New Orders (MoM) |
-0.5% |
-2.3% |
|
USD |
New Home Sales |
320K |
313K |
|
USD |
CB Consumer Confidence |
70.3 |
70.8 |
|
GBP |
GDP (YoY) |
0.3% |
0.5% |
|
GBP |
CBI Industrial Trends Orders |
-20 |
-8 |
|
USD |
Durable Goods Orders (MoM) |
-1.5% |
2.4% |
|
USD |
Core Durable Goods Orders (MoM) |
0.5% |
1.8% |
|
USD |
Interest Rate Decision |
||
|
GBP |
Nationwide Consumer Confidence |
44 |
|
|
GBP |
CBI Distributive Trades Survey |
-4 |
|
|
CHF |
KOF Leading Indicators |
0.26 |
0.08 |
Click here for updated EUR/CHF News.
Originally posted here
