Swissy rises on mixed data from Switzerland
The Swiss franc rose against the US dollar as investors reacted to mixed economic data from Switzerland. According to the statistics bureau, the country’s trade surplus increased from the previous 3.2 billion to 3.379 billion francs in July. Other data showed that secondary production declined by 7.7% in the second quarter because of the coronavirus pandemic. Total turnover fell by 12%, the biggest decline since 2009. Further data showed that the number of employed people in the country declined by 1.6% in the second quarter. Also, the number of actual weekly hours declined by 9.5%.
The US dollar rose today as investors reacted to the Federal Open Market Committee (FOMC) minutes that were released yesterday. In the minutes, the members ruled out against implementing yield curve control. They also warned about the risks the economy faces because of the coronavirus pandemic. In the minutes, the committee members asked congress to provide more stimulus to the economy but it also warned about the ballooning public debt in the US. Meanwhile, data from the Bureau of Labour Statistics showed that initial jobless claims rose by 1.1 million in the previous week. This was higher than the previous week’s 925k. The continuing claims declined from the previous 15.4 million to 14.8 million.
Global stocks turned lower today as investors started to caution about company valuations. In Europe, the DAX index, FTSE 100, and CAC 50 dropped by more than 1%. Similarly, in the United States, futures tied to the Dow Jones and S&P 500 dropped by more than 0.5%. Investors are worried about valuations, especially after Apple’s market cap climbed to more than $2 trillion yesterday. Also, investors are wondering about whether the recent momentum in stocks will continue.
The USD/CHF pair declined from an intraday high of 0.9161 to an intraday low of 0.9100. On the four-hour chart, the price has managed to move below the 50-day and 100-day simple moving averages. Also, it has moved below the descending trend line that is shown in white. The price is likely to continue falling as bears target moving below 0.9050.
The EUR/USD pair was little changed today after it dropped sharply yesterday following the Fed minutes. The pair is trading at 1.1843, which is along the 50-day and 100-day EMA as shown in the four-hour chart below. Also, the RSI has moved from the overbought level of 72 to the current level of 44. Also, the price is along the ascending white trend line. Therefore, the pair is likely to resume the uptrend provided that it remains above the two moving averages.
The AUD/USD pair dropped to an intraday low of 0.7148. On the four-hour chart, the price is along the lower line of the Bollinger Bands and below the 50-day and 100-day exponential moving averages. The signal and main line of the MACD have moved to the neutral line. The same is true with the Force index, which has moved below the neutral line. Therefore, the price is likely to continue falling.