By FX Empire.com
The EUR/CHF fluctuated heavily last week amid the rising uncertainty yet still ended the week on bullish terms and did not recover from the opening upside gap.
Despite the ongoing uncertainty in the euro area and the heavy volatility seen for the euro in the past week with the political uncertainty in Greece and Italy and fear of contagion spreading to Italy, the main influence on the pair remains the SNB.
Last week the Swiss data were alarming to markets with unemployment rising and deflation threats rising with the CPI contracting. This signaled that the SNB might take action and comments from SNB official confirmed their commitment to defend the economy and the set floor.
This week investors will continue to monitor the developments for anything new from the SNB and with the instability still seen in the euro area. We expect the pair to attempt to cover the gap seen this week as far as the expectations for action from the Swiss bank wanes further which will give the upper hand for the franc.
Eyes will be on the euro area GDP and the developments in Greece and Italy especially as if the vote in Italy passes Berlusconi could resign as soon as the coming weekend.
Other news from the euro area and the Swiss economy to affect the pair this week:
Monday November 14:
Switzerland will start the week with the Producer & Import Price Index for October at 08:15 GMT after it dropped 0.1% the previous month.
The euro area will start the week with September’s Industrial Production at 10:00 GMT which is expected with 1.5% drop after 1.2% rise.
Tuesday November 15:
Germany will start the day with the GDP for the third quarter at 07:00 GMT where the economy is expected to expand by 0.5% after 0.1% the previous quarter.
From Germany we also have the Zew Survey for November at 10:00 GMT where the Current Situation index is expected to slow to 35.0 from 38.4 and the Economic Sentiment Index to fall further to -52.0 from -48.3.
Turning to the euro area, the GDP is also due at 10:00 GMT where the economy is expected to have contracted as well by 0.2% in the third quarter in line with the pace seen in the second quarter.
The Trade Balance is due at the same time for the month of September which is expected to hold at 1.0 billion euros deficit from the previous month.
Wednesday November 16:
The euro area will release the Consumer Price Index for October at 10:00 GMT where it is expected to ease to 0.3% on the month following 0.8% rise while to hold at 3.0% on the year.
Thursday November 17:
Switzerland will release the Credit Suisse Zew Survey for November at 10:00 GMT and the expectations index might have dropped further from the previous month’s -54.4.
Friday November 18:
Germany will end the week with the Producer Price Index for October at 07:00 GMT which is expected with 0.1% rise after 0.3% and on the year to slow to 5.3% from 5.5%.
The euro area will release the construction output for September at 10:00 GMT after it recorded 0.2% rise in August.
Originally posted here
