The US dollar rallied against the Swiss franc yesterday following the overwhelmingly optimistic new home sales data for March. The Swiss trade balance data for March was also solid. However, the market was focused on the US economic data as it will decide the future course of action by the Fed. Overall, the USD/CHF pair rallied from a low of 0.8861 to a high of 0.8916 in the past 24 hours.
The Swiss trade surplus widened to CHF3.10 billion in March from CHF 2.40 billion in February. Exports rose by 1.80% m-o-m to CHF22.80 billion. Specifically, watches exports recorded a growth of 2.20%. Also, precision instruments posted a rise of 0.70%. Chemicals & pharmaceuticals reported an increase of 1.40%.
Imports fell by 1.40% m-o-m to CHF 19.70 billion. In particular, textiles declined by 0.30% in March. Also, energy and chemicals & pharmaceuticals decreased by 2.50% and 6.10%, respectively.
For the quarter ended March 2023, Switzerland’s trade balance recorded a surplus of CHF 8.28 billion, almost unchanged from CHF 8.32 billion in the quarter ended March 2022.
In the US the Federal Housing Finance Agency stated that the country’s house prices increased by 0.50% m-o-m in February following a rise of 0.10% (downwardly revised from 0.20% growth) in the previous month and pleased the market which was expecting a 0.10% decline in the house prices.
On a y-o-y basis, the US housing price index rose by 4% in February 2023.
The S&P CoreLogic Case-Shiller U.S. National Home Price NSA Index, encompassing all nine US census divisions, posted a 2% increase in February, compared with 3.70% in the earlier month. The 10-City Composite inched up 0.4% y-o-y in February, down from 2.50% in January. Likewise, the 20-City Composite rose by 0.40% y-o-y in February, following a 2.60% rise in January. Economists had forecast a decline of 0.10%.
According to the US Conference Board, the country’s consumer confidence declined to 101.30 in April from 104 in March and disappointed economists who were expecting a slight increase in the consumer confidence index to 104.10.
The present situation index, reflecting consumers’ assessment of current business and labor market conditions, rose to 151.10 in April from 148.90 in March. Also, the Expectations index, mirroring consumers’ short-term outlook for income, business, and labor market conditions, declined to 68.10 in April, from 74 in March.
According to the US Census Bureau, the country’s new home sales increased to 683,000 units in March from 623,000 units in February and surpassed forecasts of 633,000 units. The reported figure is 3.40% lower than March 2022 figure of 707,000 units.
The upbeat US new home sales data is expected to keep the USD/CHF pair range bound in the short term.
Technically, the USD/CHF pair is rising after testing the support at 0.8870. The next resistance is anticipated only near 0.8995. Additionally, the currency pair is trading above its 50-day moving average while the stochastic indicator is in the bullish zone. Therefore, we anticipate the USD/CHF pair to remain in an uptrend for the next few trading sessions.
Disclaimer: Any financial trading analysis offered here is our opinion and is not intended as advice or direction for investors. We cannot guarantee the success of any trades made as a consequence of this article, and we encourage traders to incorporate a strong money management strategy to limit losses when they enter the markets. Please use this article as part of your own research before formulating strategies prior to trading.
