Please disable Ad Blocker before you can visit the website !!!


by SignalFactory   ·  January 16, 2020 | 09:21:43 UTC  


by SignalFactory   ·  January 16, 2020 | 09:21:43 UTC  

The Franc frustrated institutional buyers of Sterling this week after Washington said it’ll be watching Switzerland closely for signs of currency manipulation in the months ahead, prompting a surge higher by the safe-haven unit.

Switzerland’s Franc has knocked the Dollar off its perch as 2020’s best performer since the country’s central bank had its collar felt by the U.S. Treasury on Monday. It’s also risen 1.6% against the Pound this week, leaving it 2.3% higher for 2020 and triggering the 1.2550 stop-loss that accompanied a Monday recommendation from TD Securities to buy the Pound-to-Franc rate and target a move from 1.27 to 1.30 over the coming weeks.

That trade was typical of how any institution might have played an ebbing of ‘no deal’ Brexit risk as well as the recent and ongoing improvement in investor risk appetite. And it should really have been a good one too. After all, the safe-haven unit is set to lose from Wednesday’s signing of the long-elusive ‘phase one deal’ to end the trade war between the U.S. and China.

The U.S.-China deal extends a lifeline to the troubled global economy and lessens investor demand for safe-haven assets like the Franc, Japanese Yen and government bonds of all stripes. And with Sterling expected to benefit from a large fiscal stimulus, details of which will be unveiled on Wednesday 29 January, the Pound was as good a candidate for gains over the Franc as any other currency even if the British unit has suffered of late as markets price-in the increased prospect of an interest rate cut.

But late Monday brought with it the latest U.S. Treasury report on the foreign exchange policies of major trading partners and included on the monitoring list inside it was Switzerland. In other words, Washington suspects Switzerland and the Swiss National Bank (SNB) of currency manipulation.

“This suggests that the US would now be more pleased with a stronger Swiss franc,” says Oliver Korber, a strategist at Societe Generale. “The central bank now faces the risk of seeing markets testing its capacity to defend further appreciation. As the US economy slows, the market’s appetite for safe havens looks set to grow. The JPY and CHF should be the main beneficiaries of these flows, mostly at the expense of the USD.”

Treasury criteria for ‘currency manipulator’ designation are simple in that a country must tick three boxes. It should have a trade surplus of more than $20 billion with the US, a current account surplus of more than 2% of GDP and have bought foreign currency equivalent to 2% of GDP over a 12-month period. Designation as a ‘currency manipulator’ could ultimately lead to trade tariffs and other measures being imposed on the guilty party.

Switzerland meets two of those three criteria in that it had a trade in goods and services surplus of $22bn last year, on U.S. Treasury numbers, and a current account surplus equal to 10.7% of GDP. It fell short on only the requirement to have acquired foreign currency equal to at least 2% of GDP over the last 12 months, with recorded purchased being equivalent to only 0.5% of GDP.


ENTER AT: 1.25770

T.P:  1.25266

S.L: 1.26210

All information on this website is of a general nature. The information is not adapted to conditions that are specific to your person or entity. The information provided can not be considered as personal, professional or legal advice or investment advice to the user. This website and all information is intended for educational purposes only and does not give financial advice. Signal Factory is not a service to provide legal and financial advice; any information provided here is only the personal opinion of the author (not advice or financial advice in any sense, and in the sense of any act, ordinance or law of any country) and must not be used for financial activities. Signal Factory does not offer, operate or provide financial, brokerage, commercial or investment services and is not a financial advisor. Rather, Signal Factory is an educational site and a platform for exchanging Forex information. Whenever information is disclosed, whether express or implied, about profit or revenue, it is not a guarantee. No method or trading system ensures that it will generate a profit, so always remember that trade can lead to a loss. Trading responsibility, whether resulting in profits or losses, is yours and you must agree not to hold Signal Factory or other information providers that are responsible in any way whatsoever. The use of the system means that the user accepts Disclaimer and Terms of Use. Signal Factory is not represented as a registered investment consultant or brokerage dealer nor offers to buy or sell any of the financial instruments mentioned in the service offered. While Signal Factory believes that the content provided is accurate, there are no explicit or implied warranties of accuracy. The information provided is believed to be reliable; Signal Factory does not guarantee the accuracy or completeness of the information provided. Third parties refer to Signal Factory to provide technology and information if a third party fails, and then there is a risk that the information may be delayed or not delivered at all. All information and comments contained on this website, including but not limited to, opinions, analyzes, news, prices, research, and general, do not constitute investment advice or an invitation to buy or sell any type of instrument. Signal Factory assumes no responsibility for any loss or damage that may result, directly or indirectly, from the use or dependence on such information. All information contained on this web site is a personal opinion or belief of the author. None of these data is a recommendation or financial advice in any sense, also within the meaning of any commercial act or law. Writers, publishers and affiliates of Signal Factory are not responsible for your trading in any way. The information and opinions contained in the site are provided for information only and for educational reasons, should never be considered as direct or indirect advice to open a trading account and / or invest money in Forex trading with any Forex company . Signal Factory assumes no responsibility for any decisions taken by the user to create a merchant account with any of the brokers listed on this website. Anyone who decides to set up a merchant account or use the services, free of charge or paid, to any of the Forex companies mentioned on this website, bears full responsibility for their actions. Any institution that offers a service and is listed on this website, including forex brokers, financial companies and other institutions, is present only for informational purposes. All ratings, ratings, banners, reviews, or other information found for any of the above-mentioned institutions are provided in a strictly objective manner and according to the best possible reflection of the materials on the official website of the company. Forex trading is potentially high risk and may not be suitable for all investors. The high level of leverage can work both for and against merchants. Before each Forex investment, you should carefully consider your goals, past experience and risk level. The opinions and data contained on this site should not be considered as suggestions or advice for the sale or purchase of currency or other instruments. Past results do not show or guarantee future results. Neither Signal Factory nor its affiliates ensure the accuracy of the content provided on this Site. You explicitly agree that viewing, visiting or using this website is at your own risk.

Signal Factory is now on Telegram

make sure to join our Telegram channel now and you will not miss any update