The EUR/CHF continued the heavy fluctuations last week within a limited range, and despite the downside bias for the pair, it ended almost flat.
Last week’s movements reflected a clear signal for the pair’s tendencies for now, which is the fact that the SNB has the biggest influence on the pair now and accordingly it continues to lack major momentum to move.
We saw strong gains for the euro versus majors on optimism that the announced measures by the EU will help contain the debt crisis, yet the pair was still biased to the downside and swissy remained strong as it gained grounds against the dollar.
The pair started to turn lower as speculation for the SNB to raise the floor receded and the pair is steady above 1.20. This week the market awaits major data and the volatility is ongoing, yet with the developments focused on the euro we still expect little major change on the pair unless anything new from the SNB is seen and accordingly on foreign currency reserves for October can affect the franc much.
From the euro area we have major data queued for release and most importantly will be the ECB rate decision, the first chaired by new President Mario Draghi. The market will also track the developments in Cannes in the G20 summit for any comments on the plan announced by Europe and how the global community intends to support after they said they are ready to help contain the crisis.
Other news from the euro area and the Swiss economy to affect the pair this week:
Other news from the euro area and the U.S. economy to affect the pair this week:
Monday October 31:
The week from the euro area starts with the CPI estimate for October at 10:00 GMT which is expected to ease back to 2.8% from 3.0%.
Also the euro area unemployment is due at the same time which is expected to hold at 1.0% in September.
Tuesday November 01:
Switzerland will release the Retail Sales for the year to September at 08:15 GMT after the previous month it was reported with 1.9% drop.
Also from Switzerland at 08:30 GMT we have the PMI Manufacturing for October hoping to see some improvement after the sector contracted the previous month as the index fell below 50 at 48.2.
Wednesday November 02:
The euro area final PMI Manufacturing for October is due at 09:00 GMT and expected unrevised at 47.3.
Thursday November 03:
The day will be dedicated to the first ECB, where new President Mario Draghi will chair his first policy meeting and the bank is expected to keep rates at 1.50% and the decision will be announced as usual at 12:45 GMT.
The decision will be followed by the usual press conference, but this time will be for Mario Draghi at 13:30 GMT as investors will be looking for any signals from the new president and the rhetoric that he will take from now on.
Friday November 04:
Switzerland will end the week with the foreign currency reserves for October at 08:00 GMT after it rose to a record the previous month of 282.4 billion.
As for the euro area, the week will end with the final PMI Services for October at 09:00 GMT which is expected steady at 47.2 and the Composite PMI which is also expected to remain unrevised at 47.2.
The euro area September producer price index is due at 10:00 GMT and expected with 0.3% rise on the month after 0.2% drop and on the year to ease to 5.8% from 5.9%.
See what are the upcoming financial event on the FX Empire Economic Calendar now!
