Swiss franc eyes Swiss CPI and GDP

Kenny Fisher MarketPulse

The Swiss franc has edged higher on Monday. USD/CHF is currently trading at 0.8514, up 0.16% on the day. With US markets closed for Labor Day, we’re unlikely to see much movement from the US dollar today.

Swiss retail sales rebounds

Switzerland’s retail sales for July surprised on the upside, with an impressive gain of 2.7% y/y. This crushed the market estimate of -0.2% and followed a revised 2.6% decline in June. It was the first increase since April and the fastest pace since February 2022. Monthly, retail sales rebounded with a 1.4% gain, up from a revised -0.3% and the market estimate of -0.2%.

The strong retail sales report failed to move the Swiss franc and investors have shifted focus to Tuesday’s inflation report. Inflation is expected to tick lower to 1.2% y/y in August, compared to 1.3% in July. Monthly, inflation is projected to rise to 0.1%, up from -0.2% in July.

The Swiss National Bank has kept inflation within its target of between zero and 2%, although it is keeping a concerned eye on the Swiss franc, which has surged 7.5% against the sagging US dollar since May 1. The Swissy sharp appreciation has kept inflation in check and the central bank has responded by trimming rates twice this year, bringing the cash rate to 1.25%.

The downside of a strong Swiss franc is that it makes Swiss exports more expensive. On Thursday, the Swiss franc dropped to 0.8400, its lowest level since Jan.2. If the Swiss franc’s continues to rise, the SNB could respond by intervening in the currency markets and blunt the upward swing.

Switzerland’s economy is expected to rise 0.5% in the second quarter, unchanged from the first quarter. The Q1 gain was the fastest expansion since the second quarter of 2022 and the service sector continues to drive the economy. Annually, the economy is expected to climb 0.9% in the second quarter, up from 0.6% in Q1.

USD/CHF technical

0.8520 is a weak resistance line. Above, there is resistance at 0.8541.
0.8491 and 0.8470 are providing support.

Author

Kenny Fisher

MarketPulse

A highly experienced financial market analyst with a focus on fundamental analysis, Kenneth Fisher’s daily commentary covers a broad range of markets including forex, equities and commodities.

EUR/USD flirts with daily highs, retargets 1.1900

EUR/USD regains upside traction, returning to the 1.1880 zone and refocusing its attention to the key 1.1900 barrier. The pair’s slight gains comes against the backdrop of a humble decline in the US Dollar as investors continue to assess the latest US CPI readings and the potential Fed’s rate path.

GBP/USD remains well bid around 1.3650

GBP/USD maintains its upside momentum in place, hovering around daily highs near 1.3650 and setting aside part of the recent three-day drop. Cable’s improved sentiment comes on the back of the Greenback’s irresolute price action, while recent hawkish comments from the BoE’s Pill also collaborate with the uptick.

Gold clings to gains just above $5,000/oz

Gold is reclaiming part of the ground lost on Wednesday’s marked decline, as bargain-hunters keep piling up and lifting prices past the key $5,000 per troy ounce. The precious metal’s move higher is also underpinned by the slight pullback in the US Dollar and declining US Treasury yields across the curve.

Crypto Today: Bitcoin, Ethereum, XRP in choppy price action, weighed down by falling institutional interest

Bitcoin's upside remains largely constrained amid weak technicals and declining institutional interest. Ethereum trades sideways above $1,900 support with the upside capped below $2,000 amid ETF outflows.

Week ahead – Data blitz, Fed Minutes and RBNZ decision in the spotlight

US GDP and PCE inflation are main highlights, plus the Fed minutes. UK and Japan have busy calendars too with focus on CPI. Flash PMIs for February will also be doing the rounds. RBNZ meets, is unlikely to follow RBA’s hawkish path.

Ripple Price Forecast: XRP potential bottom could be in sight

Ripple edges up above the intraday low of $1.35 at the time of writing on Friday amid mixed price actions across the crypto market. The remittance token failed to hold support at $1.40 the previous day, reflecting risk-off sentiment amid a decline in retail and institutional sentiment.