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Swiss Authorities Approve 109M Francs Bailout Plan for Bank UBS Group
3/31/2023 12:29 PMThe USD/CHF pair is trading within a corrective trend at 0.9140. Against the decline of the US dollar, the franc looks stable, however, uncertain dynamics can be seen relative to other competitors.
This may be due to the residual effect of the approval of the final parameters around the deal between UBS Group AG and Credit Suisse AG: Swiss government will send an additional 109.0M francs to UBS Group AG also to the usual additional appropriations in connection with the budget for 2023. The merger of the country's two largest financial institutions will lead to the creation of a global systemically important financial institution in Europe. UBS Group AG is currently valued at 1.1T dollars and Credit Suisse AG at 575.0B dollars. Macroeconomic statistics also do not contribute to the growth of the franc: the index of economic expectations from the Center for European Economic Research (ZEW) in March corrected to –41.3 points from –12.3 points a month earlier, and the indicator of leading economic indicators – up to 98.2 points from 98.9 points.
The US dollar dropped to 101.700 in the USD Index yesterday, due to the disappointing Q4 2022 report on the gross domestic product (GDP), which fell to 2.6% QoQ from 3.2% earlier against a forecast of 2.7 %, and initial jobless claims which approached 200.0K, amounting to 198.0K instead of 191.0K a week earlier, while the total number of claims reached 1.689M but it was lower than the preliminary estimates of experts at 1.687M.
On the daily chart, the trading instrument is correcting within the local downward corridor with the boundaries of 0.8900–0.9330.
Technical indicators keep a sell signal: fast EMAs on the Alligator indicator are actively moving away from the signal line, and the AO histogram is forming downward bars in the sell zone.
Resistance levels: 0.9200, 0.9330. | Support levels: 0.9085, 0.8900.