Forexpros – The U.S. dollar rose to a two-day high against the Swiss franc on Friday, paring some of the week’s losses as concerns over the debt crisis in the euro zone ahead of next week’s European Union economic summit supported safe haven demand.
USD/CHF hit 0.9065 on Wednesday, the pair’s lowest since November 14; the pair subsequently consolidated at 0.9210 by close of trade on Friday, shedding 0.70% over the week.
The pair is likely to find support at 0.9017, the low of November 10 and resistance at 0.9329, the high of November 25 and an almost eight-month high.
The dollar was higher on Friday despite better-than-expected U.S. unemployment data, as concerns over the euro zone financial crisis supported safe haven demand.
The U.S. Department of Labor said the unemployment rate dropped unexpectedly to a two-and-a-half year low of 8.6% in November, as the U.S. economy created 120,000 new jobs.
But skepticism over whether the euro zone’s bailout fund, the European Financial Stability Facility, can contain the region’s debt crisis and speculation over a potential downgrade of Spain supported the greenback.
The dollar tumbled to a twelve-day low against the Swissie on Wednesday after six major central banks including the Federal Reserve and the Swiss National Bank said they had agreed to lower dollar swap rates to prevent a lack of liquidity in the global financial system.
The announcement came after China said that it plans to cut bank’s reserve requirement ratios in an effort to help boost liquidity and support the world’s second largest economy amid global market turmoil.
Also Wednesday, industry data showed that Switzerland’s leading KOF economic barometer fell significantly more-than-expected in November.
The greenback edged slightly higher against the Swissie on Thursday amid sustained concerns over the euro zone’s debt crisis.
Earlier in the day, official data showed that Switzerland’s gross domestic product expanded in line with expectations in the third quarter, growing by 0.2%, bringing the annualized rate of growth to 1.3%.
In the week ahead, investors will be closely watching the European Central Bank’s policy meeting on Thursday, amid expectations for a 0.5% rate cut by the bank.
Meanwhile, European Union leaders are to hold a summit meeting to address the region’s crisis on Friday.
Also next week, the U.S. is to release data on service sector activity and jobless claims, while Switzerland is to produce a report on consumer 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, December 5
In the U.S., the Institute of Supply Management is to release a report on service sector activity, a leading indicator of economic health. The U.S. is also to publish government data on factory orders, a leading indicator of production.
Tuesday, December 6
Switzerland is to produce government data on consumer price inflation, which accounts for the majority of overall inflation, while the Swiss National Bank is to release its monthly report on foreign currency reserves.
Wednesday, December 7
The U.S. is to release government data on crude oil stockpiles.
Thursday, December 8
The U.S. is to publish its weekly report on initial jobless claims, the nation’s earliest economic data.
Friday, December 9
European Union leaders are to hold an economic summit in Brussels to outline plans to enforce stricter budget rules across the euro zone and prevent the region’s debt crisis from worsening.
The U.S. is to round up the week with data on the trade balance, while the University of Michigan is to release preliminary data on consumer sentiment and inflation expectations, leading indicators of economic health.
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