The Swiss franc increased against 14 of 16 major peers and to the strongest levels in seven months ahead of the Swiss National Bank meeting this week. The franc is up on more promising potential than the euro, with the euro diverging from fundamentals. For instance, the eurozone expanded a paltry .1 percent in the third quarter opposed to the .5 percent growth expansion in Switzerland.
This week’s “USDJPY & USDCHF Weekly Technicals” is playing out as the USDCHF smashed through the .90 support and trading to .8920 price action support.
The yen is also higher as equities pullback from highs. The USDJPY is hanging in there but back below 103, currently 102.72.
The South African rand also rallied against the dollar after sinking on taper fears. Debt selling in South Africa caused the rand to sink, and USDZAR was a mere 220 pips away from the 10.60 target (roughly the daily volatility). The rand is stronger against all 16 major peers. Manufacturing production surprised the markets with a 1.5 expansion in October.
The Swedish krona slid lower as Statistics Sweden reported a 1.7 percent decline on industrial production in October. This was 2.6 percent lower than the general consensus.
The euro is higher against the dollar on general weakness, pushing through 1.3760. Fundamentals out of the eurozone are bleak, and there is speculation that the market is trying to force European Central Bank (ECB) president Mario Draghi’s hand in providing more stimulus for the troubled euro-bloc.
The Sterling is trading in the red after making another high against the dollar. The Sterling hit 1.6464 per dollar before falling into negative territory. Manufacturing production came inline with expectations at .4 percent, but the trade balance figure was a £9.7 billion deficit, £300 million more than expected.
The Australian and Kiwi dollars are both trading higher against the dollar. The Chinese trade balance came in at four year highs with exports reaching a 12.7 percent increase year-over-year.