Comments noted on the weekend from the SNB's Roth have kept the markets positioned for a 25bp rate hike at the Thursday Q4 meeting. The market may not be actively buying the Franc ahead of the verdict but the CHF is seen as underpinned by the potential for further H1 tightening.
However, should the SNB move into a "data dependant" period then the CHF is expected to be sold as the dovish official outlook for H2 2007 has left many wary over the alpine economies potential in the latter stages of 07. USD/CHF attempted to retrace the Friday move into European trading but the 38.2% Fibo (of the rally from 1.1884 to 1.2101) at 1.2018 stalled the move lower. As a result the price has steadied around 1.2050 as longer-term sellers continue to battle short-term buyers.
Dealers talk of stops remaining on the downside under 1.2015 bids with more sub-1.20. Technically, the 50% level has been reinforced by the 10-Day M/A line while the 61.8% sitting below at 1.1965. Looking ahead, only Paulson comments and the October Whole-Sale Inventory data (15:00 GMT) are noted into North American trading.
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