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USDCHF – Who Wins Bulls or Bears?
Pity the poor SNB. No matter what the Swiss National Bank does, the Swissie refuses to go down. Even with the biggest negative in the world, the Swissie is near multi-month lows as risk aversion trumps the tempting yield spread. Today news that North Korea is about to launch another ICBM test sent the markets into a tizzy and USDCHF back below 9650 before the pair finally found some support.
North Korea remains a nuisance on the global stage, but its hard to believe that China would allow its vassal state to trigger a Third World War and upend the global economy. Still, the regime of NK is the most radical and unpredictable in the world and one of its provocations may get out of hand.
However, assuming the NK risk is pacified, the Swissie could see a furious relief rally especially if US data proves to be stronger than forecast. US Retail Sales are expected to be a little softer than the month prior at 0.3% vs. 0.6%. But if they beat their mark USDCHF could break out above the .9750 level and establish a clear bottom from which it could mount a rally towards parity.