Forex Pros – Last week saw the U.S. dollar slump to a two-week low against the Swiss franc on Friday amid expectations that Thursday’s interest rate hike by the European Central Bank also opened the way for the Swiss National Bank to tighten policy.
USD/CHF hit 0.9294 on Wednesday, the weekly high; the pair subsequently consolidated at 0.9062 by close of trade on Friday, tumbling 1.91% over the week.
The pair is likely to find support at 0.8895, the low of March 16 and the all-time low and resistance at 0.9294, Wednesday’s high.
On Thursday, the ECB increased its key interest rate for the first time since July 2008 to 1.25% from 1%.
Meanwhile, government data on Wednesday showed that Swiss consumer prices rose 0.6% last month, taking the annual inflation rate in March to 1.0%, well above the 0.6% forecast by analysts.
The report said the increase was primarily due to higher prices for clothes and shoes, as well as more expensive oil, which rose 4.9% on the month.
The safe haven Swiss franc was also boosted after a 7.4-magnitude earthquake and tsunami alert shook northeastern Japan on Thursday. The greenback remained under pressure on Friday as the White House and Congress attempted to break a U.S. budget deadlock in order to avoid a government shutdown.
In the week ahead, investors will be looking towards March U.S. retail sales data to gauge the strength of consumer spending, as well as U.S. data on consumer and producer price inflation.
Ahead of the coming week, Forex Pros has compiled a list of these and other significant events likely to affect the markets.
Monday, April 11
In the U.S., the Federal Reserve Bank of Chicago President Charles Evans is to speak; his comments will be closely watched for any clues to the future possible direction of monetary policy. Also Monday, Federal Reserve Governor Janet Yellen is to speak.
Tuesday, April 12
The U.S. is to release government data on its trade balance, the difference in value between imported and exported goods and services, as well as a report on import prices, an important indicator of inflation. The U.S. is also to publish monthly data on the federal budget balance.
Wednesday, April 13
Switzerland is to release government data on producer price inflation, a leading indicator of consumer inflation.
Later in the day, the U.S. is to publish government data on retail sales, the primary gauge of consumer spending, which accounts for the majority of overall economic activity. The country is also to publish official data on business inventories and crude oil stockpiles while the Federal Reserve is to publish its Beige Book.
Thursday, April 14
The ZEW Centre for Economic Research is to publish a report on Swiss economic expectations.
Later in the day, the U.S. is to publish official data on producer price inflation, a leading indicator of consumer inflation. The country is also to publish its weekly report on initial jobless claims, an important signal of overall economic health.
Friday, April 15
The U.S. is to publish official data on consumer price inflation, which accounts for a majority of overall inflation. In addition, the U.S. is to publish official data on industrial production and the capacity utilization rate, while the Federal Reserve Bank of New York is to publish its manufacturing index. The U.S. is also to publish a report on the balance of domestic and foreign investment, while the University of Michigan is to publish preliminary data on consumer sentiment and inflation expectations.
ForexPros.com
