By ForexMansion.com

 

The USD/CHF continued its southern journey and recorded the fourth consecutive loss the previous week and the third monthly drop in April as the dollar gained more weakness after the Fed opted to leave interest rate at its low level and announced its continuation to the 600 billion bond purchase program, where Bernanke pledged to keep lose monetary policy to boost growth.

In the week ending April 29, 2011 the market was affected by announcement of the Fed’s chairman which cause the dollar to trade neat all-time low against the Swiss franc, as investors expected other key central banks will tighten monetary policy before the Fed, where the drop in US first quarter GDP and increase in initial jobless claims gave further vulnerability to the dollar. 

Thus, as long as the Fed is keeping interest rate low the dollar is predicted to show more weakness along some expectations refer that the SNB would raise interest rate in June after the ECB’s interest rate hike in April, the pair’s outlook remains bearish.    

The main highlight of the week will be the infamous jobs report in the United States where estimations are in favor of improvement which may help the dollar to rebound. 

For this week, more focus will be on some important Swiss data and a batch of US fundamentals which will be affecting the pair’s movements:

Monday May 2:

The main focus will be on manufacturing data in both economies as at 07:15 GMT Switzerland will release SVME purchasing Managers Index for April with expectations showing more expansion to 59.8 from March’s reading of 59.3, where retail sales will be due at the same time. As of 14:00 GMT, the US will release ISM manufacturing for April, as forecasts refer to a drop in the index to 59.6 from the prior 61.2.

Tuesday May 3:

The Swiss economy lacks fundamentals while the US will release less important data that more likely will not have significant effect on the pair’s movement. Factory orders report for the month of April is due at 14:00 GMT where analysts expect the reading to soar1.7% from the previous 0.1% drop.

Wednesday May 4:

At 12:15 GMT then 14:00 GMT, the U.S economy is to release ADP employment change where it is expected to decrease to 200,000 in April from the previous 201,000, while ISM non-manufacturing will rise to 58.0 in April from 57.3, according median forecasts. On the other hand, the Swiss economy lacks fundamentals.

Thursday May 5:

At 12:30 GMT, the U.S economy will release initial jobless claims for the week ending April 30 and continuing claims for the week ending April 23. 

Friday May 6:

The week ends with the release of the awaited non-farm payrolls report from the United States, due at 12:30 GMT. Expectations refer that change in non farm payrolls will reach 180,000 from the previous 216,000 while unemployment will linger at 8.8%. The Swiss economy, on the other hand, will release unemployment rate for April which is predicted to retreat to 3.3% from the previous 3.4%, while the seasonally adjusted reading will also decline to 3.2% from 3.3%. 

Originally posted here

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