The pair did a downside correction to halt the upside trend that was led by the dollar’s advance on the back of the concerns from the euro area which boosted safety demand on the greenback as a safe harbor.
On Monday, the Swiss data gave strong support for the franc as unemployment came in at 3.1% last year in comparison with 3.9% in 2010, despite the franc’s appreciation. In addition, Swiss retail sales climbed 1.8% in the year ended November, exceeding both expectations of 0.2% and the revised 0.1%.
With the improvement in the data, hopes increase the SNB would refrain from intervening again in the FX market to weaken the currency as the economy seem to be on the right track.
However, the main direction for the pair will probably depend on the Sarkozy-Merkel meeting’s outcome and the latest developments in the euro area in the coming period ahead of awaited bond selling fromItalyandSpainand other euro zone economies.
On Tuesday, theU.S.economy will release less important data, including wholesales inventories as of 15:00 GMT.
The data is expected to has a slight affect the pair’s movement due to its low relevance, where the pair will probably also be affected by the general sentiment which is focusing on the latest developments from the euro area.
Originally posted here
