Impressive growth following the results of the second half of the year 2010 was shown by the Swiss currency. Its growth from the beginning of June against dollar has made more than 15 %. After appearance of debt problems in the Euro area and hints on a new round of the quantitative softening to the USA, franc has turned to one of the most attractive and reliable currencies.
Indexes of the Swiss economy testify steady recovery. Only following the results of the third quarter of 2010 annual growth rates of gross national product have made 2,8 % – one of the best values in Europe. During this time the rate of unemployment decreases (in November of 3,6 %), the prices for habitation grow. The similar situation of speaker of franc is not surprising.
On – former, the main headache for the monetary authorities is the inflation which annual level throughout the last year was near to historical minima (following the results of a year CPI won’t exceed 0,7 %). In the Swiss Central Bank they are afraid that low inflation will restrict demand, and accordingly, will lead to business activity deceleration. Thus the principal reason of low inflation in SNB name expensive franc. Besides that the high exchange rate reduces the price of import and conducts to reduction of prices so similar revaluation results also in falling of competitiveness of local exporters. We will remind that 60 % of export of Switzerland are necessary on an euro area and when the franc rises in price against euro (and for this year growth has exceeded 10 %), demand for the Swiss production in an euro zone starts to decrease.
Trying to smooth the negative currency factor, throughout all 2009 the Swiss Bank carried out pointwise interventions in the market, truth, similar interference in process market currency rate formation of any results hasn’t given. As a result SNB has reconciled to growth of franc against euro and dollar as the economy showed good growth rates. However in our opinion, it is necessary in 2011 to appear to some signs of deceleration of economic activity, including connected to debt problems of Europe as the Swiss regulator can be activated again, trying to prevent through currency interventions a deflation. It is interesting that in Bank of Switzerland already expect in the beginning of 2011 lowering a price index in the negative zone.
As a whole, under our forecasts, next year dynamics of course of the dollar-franc will balance near to parity level. So, the expected range of driving will make 0,9300-1,1000 francs for dollar.
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