The franc remained range-bound against the greenback yesterday following the release of mixed data from both the US and Switzerland. While the Swiss consumer prices inflation surpassed expectations, the manufacturing PMI missed forecasts. Likewise, the US non-farm payrolls data was better-than-anticipated, but the final manufacturing PMI data was below the flash estimates. Overall, the USD/CHF pair traded in a narrow range of between 0.9169 and 0.9217.
According to the data published by the Swiss Federal Statistical Office, the consumer prices inflation remained unaltered in November, compared with the earlier month. In October, the consumer prices inflation rose by 0.30% on an m-o-m basis. Economists had anticipated a 0.10% decline in consumer prices in November.
Correspondingly, the November consumer prices index stood at 101.60 (based on the December 2020 level of 100). On a y-o-y basis, the consumer prices inflation rose by 1.50% in November 2021.
Devoid of volatile goods such as food, energy, and fuel, the core consumer prices inflation increased by 0.10% m-o-m in November. The corresponding index stood at 100.80. On a y-o-y basis, the core consumer prices inflation rose by 0.70% in November 2021.
Clothing and footwear gained 1.40% m-o-m in November, following a rise of 0.20% in the earlier month. Transport increased at a modest rate of 0.70%, following a surge of 8% in October. Similarly, housing and energy grew by 0.30%, following a growth of 2.90%. However, restaurants and hotels posted a decline of 0.80% in November, following an increase of 1.50% in the earlier month.
The Swiss Trade Association for Purchasing and Supply Management (Procure.ch) stated that the country’s manufacturing PMI (purchasing managers’ index) declined to 62.50 in November, from 65.40 in October, and missed the reading of 64.30 anticipated by economists.
The reported reading was the lowest since February, mirroring the effect of continuing supply chain problems faced by the manufacturing sector. The production index posted a decline of 8.30 points to 52.50 in November. Likewise, the index reflecting order book and purchasing volume fell by 5.90 and 7.70 to 60.90 and 57.40, respectively. The employment index fell by 0.70 to 59.50. Purchasing prices index decreased 3.60 to 88.40. Also, the delivery times index declined from 1.20 to 82.60.
According to the data published by the ADP (Automatic Data Processing) Inc., the non-farm payrolls increased by 534,000 in November, following a rise of 570,000 in the prior month and greater than the 525,000 additions anticipated by economists.
While small businesses added 115,000 jobs, medium-sized businesses recorded 142,000 job additions. Large businesses added 277,000 jobs.
Specifically, goods-producing industries added 110,000 jobs. Also, service-providing industries saw the payrolls increase by 424,000.
Under goods-producing industries, construction and mining sectors added 52,000 and 50,000 jobs. Professional/business services reported an addition of 110,000 jobs. Likewise, trade/transportation/utilities posted an addition of 78,000 jobs. Notably, the payroll of the leisure/hospitality sector rose by 136,000. Also, education/health services recorded an addition of 55,000 jobs.
According to IHS Markit, the US final manufacturing PMI (purchasing managers’ index) declined to 58.30 in November, from 58.40 in October, and missed the economists’ estimate of 59.10, which is also the ‘flash’ reading. The reported reading was the lowest since December 2020 and mirrored the second-weakest growth in production in the last 14 months. Producers faced near-record supply delays coupled with a slowdown in fresh orders. Jobs growth also declined against the backdrop of issues related to fulfillment of vacancies.
Nevertheless, fresh sales growth considerably outpaced production growth, which slowed to an eleven-month low.
The mixed economic data from both the US and Switzerland are expected to keep the USD/CHF pair range-bound in the short term.
The historical price chart indicates that the USD/CHF pair is declining after facing resistance at 0.9320. The next major support is anticipated only near 0.9075. Additionally, the currency pair is trading below its 50-day moving average, while the stochastics indicator is declining towards the bearish zone. Therefore, we are anticipating the currency pair to remain in a downtrend in the short term.
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.
