The rates continue within an uptrend. Despite the growing popularity of safe assets at the end of the year, the USD wins against a weak CHF. This is not only due to the good yield of US bonds and low CHF liquidity, but also because of the monetary policy of the Swiss National Bank, which actively opposes the strengthening of the franc. The rate in Switzerland is -0.75%, which is the lowest interest among the largest central banks.
At the most recent meeting of the SNB, which took place this week, the rate of -0.75% was confirmed. The regulator also estimated the value of the franc as higher than the bank would like it to be. So, there is no likelihood of any increases in the foreseeable future. As a result, the upward movement of the dollar continued without any obstacles. Even the decline in stock indices in Europe due to the panic about the bankruptcy of Evergrande did not stop the growth of the USD. The focus of investors' attention remains on the elections in Germany, the results of which are 95% likely to support the euro and other risky assets. So the franc may lose in price again next week.
Macroeconomic reports in the US were mixed this week: the real estate market grew and exceeded expectations, but the number of applications for unemployment benefits turned out to be more than expected. Also, the business activity indices by IHS Markit fell again, for the fourth month in a row, which raises concerns. Nevertheless, there were no problems in the confrontation with the franc, and the perspectives remain good. Most of the technical analysis tools indicate the efficiency of the deals to BUY, and we consider such deals to be the most optimal today.
