Forex Pros – Last week saw the Swiss franc jump to a record high against the U.S. dollar, as crude oil prices surged to a two and a half year high on the back of escalating violence in Libya, sparking concerns over the impact on the global economic recovery.
USD/CHF hit 0.9222 on Friday, the pair’s all-time low; the pair subsequently consolidated at 0.9281 by close of trade on Friday, tumbling 1.58% over the week.
The pair is likely to find short term support at 0.9222, Friday’s low and resistance at 0.9391, last Thursday’s high.
The Swissie’s gains came amid fears that the spike in oil prices could hit U.S. consumer spending and create a drag on the rate of global economic growth. Crude oil for April delivery in New York climbed 14% last week, the most in two years, to USD97.88 a barrel amid concern supplies would be disrupted.
The Swissie eased slightly on Friday as crude trimmed gains after Saudi Arabia, the U.S. and the International Energy Agency said they could compensate for a supply disruption.
But the greenback remained under pressure after revised fourth-quarter U.S. gross domestic product came in weaker-than-expected. GDP rose at an inflation-adjusted annual rate of 2.8%, less than the expected 3.3% gain.
Meanwhile, data showed that Switzerland’s leading KOF economic barometer rose unexpectedly in February.
The reading rose to 2.18 from an upwardly revised 2.16 in January, the KOF Swiss Economic Institute said. Analysts had expected the KOF economic barometer to fall to 2.06 in February.
In the week ahead, any further escalation of geopolitical tensions in North Africa and the Middle East could continue to weigh on market sentiment while U.S. jobs data for February, due on Friday, will also be a major focus for markets. Meanwhile, Switzerland is to publish official data on fourth quarter GDP.
Ahead of the coming week, Forex Pros has compiled a list of these and other significant events likely to affect the markets.
Monday, February 28
The U.S. is to kick off the week by releasing a flurry of data, with industry data on pending home sales as well as a report on manufacturing activity in the in the Chicago area. The U.S. is also to publish official data on personal consumption expenditure and consumer price inflation.
Tuesday, March 1
Switzerland is to publish official data on GDP, the broadest measure of economic activity and the primary gauge of the economy’s health, as well as data on manufacturing sector activity, a leading indicator of economic health.
In the U.S., the Chairman of the Federal Reserve, Ben Bernanke, is to testify on the semi-annual monetary policy report before the Senate Banking Committee, in Washington. His comments will be closely scrutinized for clues to the future possible direction of monetary policy. Meanwhile, the Institute for Supply Management is to publish a report on manufacturing activity.
Wednesday, March 2
In the U.S., Ben Bernanke is to testify for a second day before the Senate Banking Committee. Meanwhile, the Fed is to publish its Beige Book, which contains data policymakers examined before making their interest rate decision.
The country is also to publish data on private sector payrolls compiled by payroll processing firm ADP, which heads up government data by two days, as well as a report on crude oil stockpiles.
Thursday, March 3
The U.S. is to release its key weekly report on initial jobless claims, a leading indicator of overall economic health. The country is also to publish revised data on nonfarm productivity, as well as a report on service sector activity, while Fed chair Ben Bernanke is to speak at a public engagement.
Also Thursday, Switzerland is to publish official data on retail sales, the primary gauge of consumer spending, which accounts for the majority of overall economic activity.
Friday, March 4
The U.S. is to round up the week with a closely watched report on non-farm payrolls, a leading indicator of job creation. The country is also to publish government data on the rate of unemployment, average hourly earnings as well as factory orders.
ForexPros.com
