The European market looks to be adjusting the adjustment and this has left USD/CHF to trade higher for the second consecutive session. Equity markets have held to a recovery bias and this looks to have brought calm to the broader financial market. Swiss fourth quarter GDP provided the data focus.
A slight pick up in economic activity with Q4 posting a 0.5% gain Q/Q, 2.2% Y/Y and overall the Swiss economy grew by 2.7% in 2006. The market had been looking for a better return but any data disappointment was lost within the general corrective nature to the forex market. Looking to this year the early analyst estimates point to a 2.0% pace with the US performance cited as a key factor for the year ahead.
USD/CHF based at 1.2110 last session, closed at 1.2210 and worked to a Tuesday high of 1.2243. Technically the 10-day moving average stands over the market at 1.2260 and minor intraday support comes in at 1.2195. EUR/CHF has also seen corrective action with a bounce to 1.6044 from Monday lows of 1.5930. A softer Swissy but the carry trade nervousness is likely to remain.
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