Franc falls as Switzerland’s unemployment rate continues to rise
Global stocks declined today as the market reacted to the coronavirus disease. According to the New York Times, the disease has infected more than 40k people and killed more than 775 people. Experts believe that the official numbers have been undercounted. However, there are positive signs that the epidemic is not as fatal as was widely expected. This is because the number of people who are recovering in Hubei is more than the number of deaths. Still, business activity in China is still slow. According to the Financial Times, most workers did not go to work today as was expected. Yesterday, China blocked the restart of Foxconn plants in most parts of the country.
The Swiss franc declined today after the State Secretariat for Economic Affairs (SECO) released the unemployment numbers for January. The data showed that the registered unemployment rate rose from 2.5% in December to 2.6% in February. The number of unemployed people rose to 121,018. That was 3,741 more than in the previous month. The country’s unemployment rate has been rising in the past few months. It was 2.1% in July last year. This data came a week after we received weak manufacturing PMI data. In January, the manufacturing PMI was 47.8 from the previous 48.8.
The US dollar was relatively unchanged ahead of the new budget. The Trump administration is expected to release a $4.8 trillion plan. The new plan will increase military spending by 0.3% to $740 billion. It will lower nondefense spending by 5% to $590 billion. NASA will see a 12% increase in funding while wall construction will be allocated $2 billion. The budget will also see a $4.4 trillion cut in spending over a decade. This budget will likely not pass congress, where Democrats control the House of Representatives.
The EUR/USD pair was relatively unchanged and is trading at 1.0950. The price is below the 14-day exponential moving average and is slightly below the 28-day EMA on the four-hour chart. The price is at the lowest level since October last year. The RSI declined to the oversold level of 30. The signal line of the MACD has been declining. While the pair may continue to decline, there is a possibility that it has bottomed.
The USD/CHF pair has been on an upward trend since January 31. Since then, the pair has moved from a low of 0.9628 to today’s high of 0.9783. The price is along the middle line of the Bollinger Bands. The price is also above the 14-day EMA on the hourly chart. The momentum indicator has stalled at the 100 level. The pair appears to be finding resistance at the current level as shown in the chart below. This means that there is a possibility that the pair may experience a pullback.
The XBR/USD pair declined to an intraday low of 54.25. The price is below the 14-day and 28-day EMA on the four-hour chart. The Bears Power indicator is below the neutral level while the DeMarker indicator has moved to the oversold level. The pair appears to have found support at the current level. This means that the pair may reverse the downward trend.