Focus FX - Currency Forecast on December 2009
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1 Septembrie 2009 |
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RAIFFEISEN BANK S.A. |
Adresa
Piaţa Charles de Gaulle, Nr. 15
011857 Bucureşti, Sector 1
Telefon
+40-21-306.10.00
+40-21-306.15.54
Fax
+40-21-230.07.00
Website
www.raiffeisen.ro
EUR/CHF: 1.517 - 1.53
After losing value against the euro starting on last Tuesday as we had been expecting (see our trading idea), the Swiss currency made gains again in recent days and moved to EUR/CHF 1.517, nearly unchanged compared to the previous week. We can expect impulses for a weaker franc in the coming days after the ECB meeting, so we are still confident about our buy recommendation for EUR/CHF (sell CHF).
In addition to the weak stock markets, the positive economic news from Switzerland was one of the main reasons for the gains made by the franc. The KOF economic barometer published by the economic research department at ETH Zurich climbed from -0.85 in July to -0.04 in August, the strongest jump ever recorded since the indicator was first calculated in 1991. In addition to the recovery in the core GDP component (economicsectors excluding construction and the banking system) that we have been seeing for some time, the construction industry and the banking sector have also already posted improvements. The scaling of the KOF indicator is scaled as GDP growth in annual comparison and leads the economy by one to two quarters. This means that this indicator is nowsignalling a strong recovery in the second half of the year after the major contraction in the first half of the year with positive annual growth at the turn of the year. The Swiss purchasing managers' index (PMI) for August was up nicely and is now at 50.2, past the growth threshold of 50 (July was 44.3). The respondents from the processing industry were especiallyoptimistic about new orders (56.4), while the inventories component is still not budging from serious contraction levels (36.5).
After Swiss GDP contracted by 0.9% from Q4 2008 to Q1 2009, this downward trend continued with a decline of 0.3% compared to January to March, but at a considerably decreased pace. GDP contracted by only 2% compared to Q2 2008, but this is because the financial crisis hit Switzerland relatively late (first GDP decline in Q3 2008). In accordance with this, it seems that the economic upswing will also come later. But the Swiss economy should be expanding again in Q3.
