CHF should remain defensive - Westpac

Research Team at Westpac, suggests that the weakness in Swiss economy still persists and as a consequence CHF should remain on the defensive near term.

Key Quotes

“Better than expected GDP was largely due to increased govt spending whilst declines in investment and a stagnating consumer base underline the weakness of the domestic economy, as the low KOF report stressed. Although trade profiles have improved, this reflects rebalancing after 2015’s deterioration. Inflation remains uncomfortably negative and so the SNB is unlikely to be able to alter its policy. Consequently CHF should remain defensive.

Technical: 0.9650 could be pivotal as broad range trading persists. A near term rebound above 0.9740 should reverse near term slippage and re-instate potential for a secondary test of 0.9885-00 and possibly a push towards 1.00.”