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Research Market strategy
by Swissquote Analysts
Daily Market Brief

Swissie strengthens due to low trading activity


Swissie strengthens due to low trading activity

By Vincent Mivelaz

Thanksgiving seems to start on a high note at first sight following the release of a positive GDP revision for third quarter that pictures a stronger US economy. Yet US President Donald Trump signature of the Hong Kong Human Rights and Democracy Act favors a risk-off environment, with safe-haven yen gaining traction in anticipation of Beijing retaliation measures. Accordingly, USD/CHF trades slightly lower in close trading, currently trading below mid-October level and below par since mid-June 2019. Despite limited market activity due to the US National Day, risks of bumps and dumps are high, as major events can have serious repercussions, especially with thinner liquidity.

The release of firmer 3Q GDP growth second estimate at 2.10% compared to first estimate at 1.90% is confirming a more upbeat US economy, which combined with stronger labor data, supports the optimistic view of Fed Chairman Jerome Powell that further easing is not planned at current time. On the same line, Switzerland 3Q GDP quarter-on-quarter and year-on-year figures posting at 0.40% (prior: 0.30%) and 1.10% (prior: 0.20%) respectively due to rising output in both pharmaceutical and energy industries, reinforces the view that the Swiss National Bank is not expected to move so far.

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