the European Central Bank I raised her The main interest rate increased by 25 basis points during the May meeting, indicating a slowdown in the pace of policy tightening. However, now the borrowing costs have arrived The highest level since July 2008 After 7 consecutive interest rate hikes, the European Central Bank seeks to combat high inflation, despite persistent recession risks.
The central bank also announced plans to halt cash reinvestment from maturing bonds purchased under the €3.2 trillion app as of July. The latest economic data revealed that the inflation rate in the eurozone rose to 7% in April, with the core rate remaining near the March high of 5.6%. Interest rates on major refinancing operations, as well as interest rates on marginal lending facilities and deposit facilities increased to 3.75%, 4.00%, and 3.25%, respectively. while, President Lagarde She said in her press conference that the ECB has more to discuss and will not stop the rate hike cycle anytime soon.
Meanwhile, the Swiss franc pair strengthened against the euro after European Central Bank interest rate policy decision. the EURCHF The currency pair continues to show notable weakness, as the banking chaos in the US favored the Swiss Franc as a hedge against uncertainty.
the Swiss National Bank In this case, you are likely to keep a close eye on the strength of the Swiss franc, as a stronger Swiss franc would dampen the economy, which is highly dependent on exports. This week’s data reaffirmed that the Swiss economy is showing some signs of stress. Consumer confidence fell to -13 in the second quarter, down from -9 in the first quarter. The Manufacturing PMI continued to decline, slowing from 47.0 to 45.3 in April. On Friday, the CPI for April is expected to rise to 0.5% m/m from 0.2% in March.
Technical review
EURCHF It fell -0.23% on Thursday, to close at 0.9753. This decline was an extension of the January 2023 peak, after 0.9406 The rebound failed to continue rising and stopped slightly above the parity level.
The intraday bias is to the upside, currently breached 0.9848. On the upside, we see the nearest resistance at 0.9879, A move above this level will open the opportunity for a retest 1.0000 And 1.0096 parity levels. In the short term, the bear pressure appears to be holding 0.9850. This is reflected by technical indicators confirming this, with the price below the 50 day moving average, the RSI at 35.8 and the MACD in sell territory.
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Eddie Fangisto
Market Analyst – HF Education Office – Indonesia
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