Forex Pros – The U.S. dollar touched a record low against the Swiss franc last week, weakening after a flurry of mixed U.S. data reiterated the view that the Federal Reserve is likely to maintain its loose monetary policy while the U.S. economy recovers.
USD/CHF hit 0.8895 on Thursday, the pair’s all time low; the pair subsequently consolidated at 0.8919 by close of trade on Friday, shedding 1.64% over the week.
The pair is likely to find short-term support at 0.8895, last Thursday’s low and the record low and resistance at 0.9074, the high of April 12.
Data on Thursday showed that U.S. initial jobless claims rose to a two-month high the previous week. Meanwhile, data on Friday showed that while consumer price inflation rose 0.5% in March, core CPI, which excludes food and energy prices, rose just 0.1%, less than the expected 0.2% gain.
Fed Vice Chairman Janet Yellen said Monday that an increase in food and fuel costs would have only a temporary impact on inflation and consumer spending and did not warrant a reversal of record monetary stimulus.
The Swiss National Bank has kept rates ultra-low since the global financial crisis but robust growth and the recent rate hike by the European Central Bank have made a Swiss rate hike more likely.
Swiss central bank head Philipp Hildebrand said on Friday the country’s very strong currency posed a problem and a considerable challenge for exporters.
“As a result of the strong appreciation, we do expect that growth will come down somewhat,” Hildebrand said. “We are looking at growth forecast for this year of around 2%.”
In the week ahead, investors will be looking towards U.S. government data on building permits and home sales, while Switzerland does not have any significant releases scheduled for the week.
Ahead of the coming week, Forex Pros has compiled a list of these and other significant events likely to affect the markets.
Monday, April 18
In the U.S., Federal Reserve Bank of Dallas President Richard Fisher is due to speak at two events in Atlanta.
Tuesday, April 19
The U.S. is to publish government data on building permits, an excellent gauge of future construction activity as well as a report on housing starts, a leading indicator of economic health.
Wednesday, April 20
The U.S. is to publish industry data on existing home sales, a leading indicator of economic health. The country is also to publish a government report on crude oil stockpiles.
Thursday, April 21
The U.S. is to publish official data on initial jobless claims, the nation’s earliest employment data. The country is also to publish data on house prices and natural gas stockpiles. Meanwhile, the Federal Reserve Bank of Philadelphia is to publish an index of manufacturing activity, a leading indicator of economic health.
Friday, April 22
Markets in Switzerland, the euro zone, the U.K., Canada, Australia and New Zealand will be closed for Good Friday.
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