Economic barometer continues positive dynamics

Following Swiss National Bank's projections of a stronger growth in the coming months, the leading indicator from a research company KOF showed a sharp gain in index, supporting the case of acceleration of domestic economy. The KOF barometer, which is designed to predict economy's performance during the next six month, soared to 1.72 this month, hitting its highest level since July 2011 and significantly higher from a revised 1.54 a month earlier and beating expectations for 1.57. The measure has maintained its strong upward momentum since April 2012, and even despite a slight slowdown in the second quarter, fundamental data are pointing to economic amelioration during the rest of the year. The company also noticed that the observed improvement reassures the upswing will persist in the near future as well.

On Wednesday, EUR/CHF fell to 1.2336 after trading around 1.37, reflecting strengthening of the Alpine currency. Earlier this month SNB's President Thomas Jordan once again repeated central bank's decisiveness to defend the cap on the Swiss Franc for as long as it is needed to ward off deflation and recession, as well as eliminate possible downside risks to the economy. Meanwhile, the Swiss National Bank currently projects a 1.5% growth for this year; however, recent fundamental data is suggesting the growth can be even stronger.