Into European trading and USD/CHF was forced to trade on a par with EUR/USD as holiday conditions continued to impact short-term volatility. USD/CHF dipped to 1.2140, absorbing a few decent buyers around 1.2150/55 in the move, in early European trading. However, this move was soon corrected and the bounce found standing supply into 1.2180 ahead of the North American open.
More offers are seen into the failure high from yesterday at 1.2195, with 1.2200/10 then looked for. Dealers cite the slew of US data later today as further cause for short-term volatility. In other news, Swiss data today saw the latest Swiss trade data released. The November surplus narrowed to CHF 1.31Bln, from CHF 1.49Bln, as the rise in imports overpowered the rise in exports. Watch exports are up 13% on the year, seen hitting CHF 1.52Bln in November.
On the whole the data remains supportive to the robust outlook to the mountain economy and some remain optimistic that the SNB will again hike Swiss rates in Q1 07 by a further 25bps. However, with the CHF still cheap to carry, further weakness will be eyed into H1 2007.
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