As the U.S. dollar spirals lower, U.S. dollar parity with the Swiss franc seems inevitable. “It’s a safe haven currency,” says Jason Yu, currency strategist for ODL Securities, adding that market turmoil is always good for the franc and the Japanese yen, both typically low yielding currencies. He says that since the USD/CHF broke through the 105 level, there is no further support and that we could see parity between the two. And he is bearish the U.S. dollar for the first half of the year, noting the drop of 63,000 in the nonfarm payrolls from February, which was the worst in five years. He says weekly pivot points are at 1.0060 and 98.88
“The unemployment report helped the Swiss relative to some of the majors,” says Robert Kurzatkowski, analyst for optionsXpress Inc. and while negative U.S. economic information is seeping into Europe, Switzerland has been relatively isolated from that. In addition, the euro has been overbought and he expects some reluctance to take it higher. He expects further strength in the Swiss, moving beyond parity to .98 or even .96, and says even a corrective move to 1.08 won’t change the technicals. He adds that a dollar correction, moving beyond parity, seeks consolidation at 105, 108 and 111, and for support to come in at parity. “It’s going to key on where we are as far as comparing it to the euro zone,” he says.
