EUR/CHF Fundamental Analysis January 28, 2015 – Forecast

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Updated: Jan 27, 2015, 12:54 GMT+00:00

Analysis and Recommendations: The EUR/CHF added 127 points to trade at 1.0277 as the pair recovers from central bank shock syndrome. The euro has been

EUR/CHF Fundamental Analysis January 28, 2015 - Forecast

Analysis and Recommendations:

The EUR/CHF added 127 points to trade at 1.0277 as the pair recovers from central bank shock syndrome. The euro has been steadily recovering as the ECB and Greek stress has moved from the markets. The decision by the ECB to inject over €1 trillion into Europe’s flagging economy was expected in non-EU member Switzerland.

Only a week ago the Swiss National Bank had telegraphed its understanding that something was afoot in euroland when it announced it would abandon its policy of pegging the Swiss franc to the euro, a move which took markets, other central banks, and even Switzerland’s own government by surprise. Days before, senior bank officials said the policy, in place since September 2011 and designed to keep the franc down and thus protect Switzerland’s exports, would stay.

So the quiet little press release slipped out last Thursday morning caused shock. The Swiss decision pushed the euro off a cliff, the franc soared over 20%, and markets around the world went into panic mode.

In Switzerland itself, ordinary people queued to buy euros at knockdown rates, banks ran out of currency, and Swiss railways lay on extra trains for weekend shoppers keen to grab bargains in neighboring France and Germany. Swiss products, from watches, to cheese, machine tools, pharmaceuticals and skiing holidays have all become 20% more expensive.

Protecting the economy is the role of the Swiss National Bank, and the need to keep the Swiss franc at a competitive level was the very reason the bank introduced the currency peg in the first place.

FxEmpire provides in-depth analysis for each currency and commodity we review. Fundamental analysis is provided in three components. We provide a detailed monthly analysis and forecast at the beginning of each month. Then we provide more up to the data analysis and information in our weekly reports.

Today’s economic releases actual vs. forecast:

Cur.	Event	Actual	Forecast	Previous
AUD	NAB Business	2		1
GBP	Mortgage Approvals	35.7K	36.6K	36.7K
GBP	GDP (QoQ) (Q4)	0.5%	0.6%	0.7%
GBP	GDP (YoY) (Q4)	2.7%	2.8%	2.6%
USD	Core Durable Goods		0.6%	-0.7%
USD	Durable Goods Orders		0.5%	-0.9%
USD	CB Consumer		95.1	92.6
USD	New Home Sales (Dec)		450K	438K

Upcoming Economic Events that you should be monitoring:

Wednesday, January 28^h

Cur.	Event	Actual	Forecast	Previous
AUD	CPI (YoY) (Q4)		1.8%	2.3%
AUD	CPI (QoQ) (Q4)		0.3%	0.5%
AUD	Trimmed Mean CPI		0.5%	0.4%
USD	FOMC Statement
USD	Fed Funds Target Rate		0.25%	0.25%