Swiss Franc Little Changed After Disappointing CPI Data
- Swiss CPI declined on a month-on-month and year-on-year basis
- SNB likely to maintain existing policy mix unchanged in the near future
- Swiss Franc slightly lower vs. US Dollarbut resistance levels holding
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Switzerland’s Consumer Price Index was lower than median forecasts in October, falling 0.1 percent from the previous month and disappointing calls for a 0.1 percent increase. The year-on-year inflation rate also declined, falling 0.3 percent to produce a larger drawdown than the0.1 percent drop the market had anticipated.
Despite last’s month slight improvement in the monthly CPI number (+0.3% m/m), the year-on-year trend underscores it will be some time yet before the Swiss economy emerges from its deflationary cycle and moves toward the SNB’s target 2 percent price growth rate. As such, the central bank is unlikely to tamper with interest rates or abandon the EURCHF floor at 1.20 in the near term.
In this context, the response from USDCHF was reasonably minor, with prices briefly rising but failing unable to breach the first layer ofdaily pivot point resistance at 0.9137. A break above this threshold sees subsequent upside barriers at 0.9175 and 0.9236.
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USDCHF 5 Min: Nov 5, 2013
Chart created byCecilia Sanchez-Corona using Marketscope 2.0
-- Written by Cecilia Sanchez-Corona, DailyFX Research. Feedback can be sent to email@example.com
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.