USD/CHF Forecast Dec. 28, 2011, Fundamental Analysis

On Tuesday trading, the markets witnessed thin trading amid the year-end holidays. Yet, the franc showed a drop against the green currency after the release of Swiss UBS consumption.

Data from the Swiss economy showed a drop in UBS consumption indicator for the first time in three months to 0.81 in Nov. from the revised 0.91, reflecting the uncertain prospect for the retail sector.

Last week, there have been talks last week about further measures to curb the franc’s advance as a panel from the government and the central bank discussed measures such as capital controls and negative interest rates and even restrictions, including a possible ban, on foreigners buying Swiss real estate to halt the franc’s rally which negatively affected prices and exporters.

Therefore, the franc may be under some pressure on growing speculations policy makers will intervene again to push down the franc.

Meanwhile, eyes will track the latest data from the U.S. to see the progress of the economy as last week’s data provided hopes the U.S. economy will lead the recovery path in 2012 without the need of further stimuli from the Fed.

Later in the day, the U.S. will release S&P/caseShiller for the month of Oct., due at 14:00 GMT, which is predicted to record -0.20% from the prior -0.50%, followed by consumer confidence, available at 15:00 GMT, where analysts forecast a soar to 58.5 in Dec. from 56.0 a month earlier.

On Wednesday, KoF Swiss leading indicator which is estimated to retreat to 0.20 in Dec. from the preceding 0.35 will be available at 10:30 GMT, while the U.S. lacks fundamentals.