No Relief for Swiss Franc Post Inflation Report

The Swiss Franc was one of the biggest losers against the US dollar, as it continued to decline and traded towards the 0.9680 level during this past week. The USDCHF pair managed to correct lower yesterday, but any hope of further strength in the Swiss franc was diminished post economic releases. There were a few important economic releases lined up during the London session, including the Swiss inflation and retail sales data. The first in the line was the Swiss Consumer Price Index, which was released by the Swiss Federal Statistical Office.

The market was expecting the Swiss CPI to register an increase of 0.2% in September 2014, compared to the previous month. However, the outcome was a touch lower, as the Swiss CPI rose only 0.1%. In terms of yearly change, the Swiss CPI was even worse as it registered a decline of 0.1%, compared with the same month in the previous year. This was on the disappointing side, and the impact on the Swiss franc was obvious, as it traded lower. The surprise part as the EURCHF pair, which traded lower and marked resiliency of the Swiss franc.

Swiss Retail Sales

There was one more important release lined up during the London session i.e. the Swiss retail sales data was published by the Swiss Federal Statistical Office. The market was expecting the Swiss retail sales to register a gain of 0.7% in August, compared with the same month in the previous year. However, the outcome was very positive, as the Swiss retail sector grew by 1.9%. One more important point to note was that the previous reading was also revised up from -0.6% to -0.3%. The report published added that the real and nominal the retail sector rose by 2.3% in August 2014 compared with July 2014 when we consider seasonally adjusted data.

In terms of monthly change, it registered an increase of 2.4% in August 2014, compared with July 2014 in nominal terms. The non-food sector showed positive growth of 3.0%, according to the report.

The USDCHF pair was seen trading higher after the release. There is an important support around the 0.9580-70 area. However, the pair is trading around overbought readings on the higher timeframe, and that is the reason that there is a chance of one more low in the coming sessions. On the upside, 0.8640 is a hurdle for buyers.