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In its latest economic forecast report, published before the European session on October 12, the Swiss government upwardly revised the GDP predictions for 2020. The government now expects a -3.8% economic contraction during the current year versus -6.2% forecast in June and -5% revision in September. On the positive side, the expectations are high for a +3.8% GDP gain in 2021 versus a +4.9% anticipated rise previously.

Further details suggest recoveries in the Consumer Price Index (CPI) data for 2020 and 2021 from earlier projections. That said, the CPI is likely to drop by -0.7% and -0.1% in the stated years versus the previous forecasts of -0.9% and -0.3% in that order.

FX implications

Following the news, USD/CHF refreshes the intraday low to 0.9099. However, a lack of major data/events and off in the US pulls the pair back to 0.9100 by the time of the press.