THE TAKEAWAY: SECO cuts the Swiss GDP forecast for 2013 -> Inflation prediction also lowered for 2012 and 2013 -> No significant Franc reaction
The Swiss government cut its forecast for GDP growth in 2013. According to State Secretariat for Economic Affairs (SECO), the Swiss economy will only expand by 1.3% in 2013, as the prediction was lowered from a previous 1.4% annual growth. SECO kept the 2012 growth prediction at 1.0% and is now predicting 2% growth in 2014.
SECO also cut its predicted inflation rate for 2012 to -0.7% from a previous forecast for -0.5% inflation. SECO expects consumer prices to only rise 0.2% in 2013, down from 0.5%, and inflation to continue at 0.2% in 2014. It also forecasted a 3.3% unemployment rate in 2013, as well as a 1.3% increase in household spending over the same year, which was slightly higher than a previous prediction of 1.2% growth in household spending in 2013.
The Swiss GDP grew 0.6% in Q3, following a 0.1% decline in Q2. Later today, the Swiss national bank will set the interest target rate for December, 0.00% is expected.
The news of the lower forecast did not significantly affect Franc trading in forex markets. EURCHF is currently trading around 1.2120, and resistance could be provided around a 3-month high of 1.2167, and support could be provided by a support line around 1.2034.
EURCHF Daily: December 13, 2012