Swiss franc Fundamental Analysis February 20, 2015 – Forecast – USDCHF & EURCHF

Analysis and Recommendations:

The USD/CHF and the EUR/CHF both gained today as the US dollar gained momentum to trade at 0.9480 up by 56 points and against the euro at 1.0780 its highest level since the SNB peg removal. Swiss ZEW investor sentiment posted its biggest monthly drop in the history of the indicator in February, after the central bank scrapped its cap on the value of the franc, clouding the outlook for the economy.

The Swiss National Bank stunned financial markets last month by scrapping its 1.20 per euro cap on the franc, sending the currency soaring and stocks plunging and leading economists to forecast a recession for the export-reliant economy.

Economic expectations in Switzerland slumped in February as financial analysts assessed the potential damage to the economy from the surge in the Swiss franc after the country’s central bank lifted its cap on the currency.

The Swiss National Bank will cut interest rates again in an effort to head off economic damage from the franc’s surge after scrapping its currency cap, according to a survey.

Twenty-six of 28 economists in Bloomberg’s monthly survey forecast that SNB will loosen policy if the economy weakens following its shock decision to give up the franc ceiling in January. Forecasts collected by Bloomberg show a gloomier outlook with growth expected to slow through June of this year. Twenty-two of the respondents see the SNB cutting the rate on sight deposits, currently at minus 0.75 percent, in tandem with a reduction in the benchmark interest rate.

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:

Upcoming Economic Events that you should be monitoring:

Friday, February 20^th

Government Bond Auctions

Date Time Country

Feb 23 11:30 Germany Eur 1.5bn 12M (Feb 2016) Bubills

Feb 23 16:30 Italy Announces details of BTPs/CCTeus on 26 Feb

Feb 24 11:10 Italy Auctions CTZ/BTPei

Feb 24 19:00 US Auctions 2-yr Notes

Feb 25 11:03 Sweden Holds bond auction

Feb 25 11:30 Germany Eur 4bn Apr 2020 Bobl

Feb 25 19:00 US Auctions 2-yr FRN, plus 5-yr Notes

Feb 26 12:10 Italy Auctions BTPs/CCTeus

Feb 26 19:00 US Auctions 7-yr Notes