Swiss Franc Ignores CPI Data as US Impasse Dominates Markets
Talking Points:
Swiss CPI rose more than expected on month to month basis
Data Prompted no response on Swiss Franc
Market focus continues to be the US shutdown
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September’s Swiss Consumer Price Index rose slightly more than economists expected, adding 0.3 percent from the previous month and topping calls for a 0.2 percent increase. The year-on-year inflation rate showed a 0.1 percent decline, in line with median forecasts.
Despite the marginal month-on-month improvement, the Swiss economy still remains in deflationary territory. The SNB is expecting prices to shrink at a year-on-year pace of 0.2 percent, a far cry from the 2 percent target inflation rate. As such, the central bank is unlikely to raise the target interest rate or abandon the EURCHF floor at 1.20 any time soon.
The Swiss Franc has appreciated against the US Dollar in recent days amid risk aversion driven by the US government shutdown. The currency met with selling pressure amid corrective profit-taking overnight, with USD/CHF edging toward initial daily pivot point resistance at 0.9067. A break above that aims for subsequent barriers at 0.9104 and 0.9167. On the downside, the support levels line up at 0.9004, 0.8978 and 0.8915.
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USDCHF 5 Min: Oct 7, 2013
Chart created byCecilia Sanchez Corona using Marketscope 2.0
-- Written by Cecilia Sanchez Corona, DailyFX Research. Feedback can be sent to csanchez@fxcm.com.
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