USD/CHF: SNB expects worst Swiss economic contraction in over five decades


USDCHF Movement

For the 24 hours to 23:00 GMT, the USD rose 0.26% against the CHF and closed at 0.9514.

Data showed that Switzerland’s trade surplus narrowed to CHF2.8 billion in May, amid plunge in watch exports and compared to a revised surplus of CHF4.0 billion in the previous month.

Separately, the Swiss National Bank (SNB), in its latest interest rate decision, maintained its key interest rate steady at -0.75%, in line with expectations. Further, the central bank cut its inflation forecast for 2020 to -0.7% from -0.3% seen in March, citing weaker growth prospects and lower oil prices. Also, it expects the economy to shrink around 6% this year, which would be worst decline since the oil crisis of 1970s.

In the Asian session, at GMT0300, the pair is trading at 0.9511, with the USD trading slightly lower against the CHF from yesterday’s close.

The pair is expected to find support at 0.9488, and a fall through could take it to the next support level of 0.9464. The pair is expected to find its first resistance at 0.9530, and a rise through could take it to the next resistance level of 0.9548.

Amid no macroeconomic releases in Switzerland today, investor sentiment would be governed by global macroeconomic factors.

The currency pair is showing convergence with its 20 Hr moving average and trading above its 50 Hr moving average.

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