Easter Holiday, Swiss Franc, Greenback

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swissThe Easter holiday is upon us, with many western or Christian countries having public holidays either side of a long weekend, although the U.S.A. is open as usual tomorrow, Monday 21st April. Despite that, Forex markets will be open as usual, from the start of the day in Asian financial centers. Of course, liquidity will be thin, and spreads wide, until the U.S. opens later in the day.

The big events this week are advance GDP data for the U.S. Dollar, and regular monthly central bank input for the Japanese Yen and for the Canadian Dollar too.

Unusually, the Swiss Franc has been in the spotlight lately, as it falls to new multi-month lows against the U.S. Dollar. The Franc tends to revert to its mean (average) rather than trend, especially in recent years as the Swiss National Bank are probably taking a more active approach in maintaining the rate of exchange within a certain price band they are holding as a secret target. However, the President of the Swiss National Bank has publicly stated that he considers the Swiss Franc to be overvalued and would be prepared to cut the current negative interest rate of 0.75% even further. These comments would normally be expected to lower the relative value of the Swiss Franc even further, so we may now see this bearish trend in the Swiss Franc take off to reach new lows. A sustained break of the USD/CHF currency pair above the psychologically important level of 1.0250 would be a major bullish event.

The weakness of the British Pound is significant, given that a second extension to Brexit has been agreed which may last until the end of October. The U.S. Dollar looks strong against the major European currencies and against the Japanese Yen too, which is a little strange because looking at the U.S. Dollar index alone, the Dollar does not look very likely to advance much further over the coming days. Much will probably depend upon Friday’s advance GDP data.

Adam is a Forex trader who has worked within financial markets for over 12 years, including 6 years with Merrill Lynch. He is certified in Fund Management and Investment Management by the U.K. Chartered Institute for Securities & Investment.