CHF Currency Report | Nov 25 2020

Since our last report (11/19), the Swissie (CHF) has appreciated 0.56% to $1.1013/USD against a weaker US dollar, which today saw its weakest level since April of 2018. According to Credit Suisse and CFA Society Switzerland, economic and investor sentiment increased from 2.3 in October to 30 in November, following news on increased vaccine availability. Optimism in the equity markets has not been this high for more than two years, stated analysts at Credit Suisse.

However, in the weeks to come, the CHF/USD pair is likely to see a downward trend due to the release of stronger than expected U.S. economic data and Janet Yellen's selection as President-elect Joe Biden's Treasury Secretary nominee. This recent news led the Dow Jones Industrial Average to cross a major milestone on Tuesday, closing above 30,000 for the first time ever. Such strength in the US economy is likely to appreciate the USD, therefore offsetting recent CHF gains. This is positive news for Switzerland’s large export business.

Technical Analysis | Since August, the CHF/USD pair continues to be trapped between a resistance and support range of 1.11 and 1.077 respectively, as seen in Deaglo’s spot chart below. Should the CHF continue to appreciate upward and touch 1.11, the pair is likely to see a downward trend toward the lower support level of 1.077.

SNB | The Swiss government today (11/25) reappointed the governing board of the Swiss National Bank (SNB) for another term. The Board will remain comprised of Chairman Thomas Jordan, Vice-Chairman Fritz Zurbruegg, and governing board member Andrea Meachler through 2027. Apart from this, the SNB has been relatively quiet over the last week.

Upcoming events likely to influence the CHF are:

· Retail sales YoY for October (due 30 NOV);

· KOF Leading Indicators (due 30 NOV); and

· GDP Growth Rate YoY (Q3)