Morning Forex Fundamental: CHF

Morning Forex Fundamental: CHF

"The year-on-year growth rate of Swiss Gross Domestic Product (GDP) in the near future can therefore be expected to be positive' - The KOF institute

The Alpine country is widely expected to gain momentum in the upcoming months, buoyed partially by an improvement in business sentiment in neighbouring Eurozone countries, the leading Swiss indicator showed Friday. The KOF barometer, which is designed to predict the direction of the economy over the following 6 months, increased to 1.36 in August, up from July's revised figure of 1.25, beating analysts' expectations of a 1.32 reading. This reading came as surprise to majority of analysts, as other indicators published earlier were pointing at weak pace of growth.

However, the upward movement of leading indicator suggests that Swiss economy will exhibit positive dynamics in the nearest future. The main reason for such suggestion is that the KOF barometer is based on three modules- core GDP, construction output and banking, which all moved in the positive direction. In June Swiss authorities upgraded its 2013 growth forecast to 1.4%, while the SNB still projects a growth of 1-1.5%. On September 3 Swiss statistical office will publish its second quarter figures and the better-then-expected reading of KOF leading indicator is adding to signs the growth can outpace analysts' projections.