By FX Empire.com
In the week ended Nov 18, the USD/CHF showed incline for the third week as the tensions stemming from the euro area enhanced demand on the dollar as a refuge.
The rise in Spanish and French bond yields on the back of the soar of Italian 10-year notes above 7%, the highest since the inception of the euro, triggered concerns the debt contagion is spreading among the euro region’s largest economies.
The political changes taking place in the region’s highly indebted nations, namely Greece and Italy, could not allay fears, especially amid disputes between European leaders regarding the role of the ECB to counter crisis and the veil of details of expanding the EFSF rescue fund so far.
However, the improvement in the U.S. data managed to ease some of the tensions in the market, yet it did not shift the sentiment as the main concern meanwhile is on the euro zone as investors believe the debt crisis may drag global economies into another recession as well as financial turbulences.
This week, the main focus will be on Swiss trade data, amid speculations the SNB may intervene again to raise the franc’s cap against the euro, especially as the recent Swiss companies’ earnings reports showed the profits were negatively affected by the franc’s appreciation. In the U.S., the main highlight will be GDP 3q annualized second reading, minutes of FOMC meeting and other important data.
The release of the data this week will be as follows:
Monday Nov 21:
The Swiss economy will start the day with the release money supply M3 for the year ending Oct. at 08:00 GMT.
As of 15:00 GMT, the U.S. will release existing home sales which are estimated to record 2.2% drop in Oct. compared with a prior of -3.0%.
Tuesday Nov 22:
At 06:00 GMT, the Swiss economy will release its most important data for the week which is trade data for Oct. with exports and imports during the month.
In theU.S., the main focus will be on the main highlight of the week which is GDP annualized for the third quarter (second reading), which is predicted to remain unrevised at 2.5%, where it will be available at 13:30 GMT. Thereafter, the concentration will shift to minutes of the FOMC meeting due at 19:00 GMT.
Wednesday Nov 23:
Eyes will be on MBA mortgage applications for Nov. 18 at 12:00 GMT while will be followed by durable goods and personal spending at 13:30 GMT. Durable goods report is predicted to show a drop of 1.0% in Oct. from the prior 0.8% drop, while personal spending will signal a drop to 0.3% in Oct. from 0.6% in Sep.
Due to thanks giving holiday on Thursday, initial jobless claims for the week ending Nov. 19 and continuing claims for the week ending Nov. 11 will be available at 13:30 GMT. Thereafter, at 14:55 GMT, University of Michigan confidence will show a rise to 64.5 in Nov. from the prior 64.2.
Thursday Nov 24:
Both economies lack economic fundamentals which propose that there would be calm trading on the pair, especially due to thanks giving holiday, which is predicted to follow the general trend in market as it will not able to get direction from data.
Friday Nov 25:
The week ends with the release of no data from both economies which suggest that the pair will follow the general sentiment in market.
Originally posted here
