Forexpros – The U.S. dollar ended the week moderately higher against the Swiss franc on Friday, as better-than-expected U.S. employment data weakened expectations for additional monetary easing measures by the Federal Reserve.
USD/CHF hit 0.9248 on Wednesday, the pair’s highest since January 25; the pair subsequently consolidated at 0.9178 by close of trade on Friday, adding 0.66% over the week.
The pair is likely to find support at 09114, the low of February 1 and resistance at 0.9251, the high of November 30.
The U.S. Department of Labor said nonfarm payrolls rose by 243,000 last month, the fastest increase in nine months, after a revised 203,000 gain in December. Economists had expected the U.S. economy to add 150,000 jobs in January. The unemployment rate unexpectedly declined to a three-year low of 8.3%.
A separate report showing a greater-than-expected expansion in the U.S. service sector in January also boosted the greenback.
Following last month’s policy meeting the Fed pushed back the timing of a likely interest rate hike until mid-2014 and indicated that the bank may embark on a third round of quantitative easing.
In testimony to the House Budget Committee in Washington on Thursday Fed Chairman Ben Bernanke said the economy has shown “signs of improvement” but warned that the outlook remained “uncertain”.
Meanwhile, the safe haven greenback also found support amid concerns over delays in negotiations on a debt restructuring deal for Greece persisted, despite assurances from European officials that a deal is close to being finalized.
Greece needs to secure an agreement with its private creditors on a debt swap deal in order to receive its next tranche of bailout funds in order to avoid a default when a EUR14.5 billion bond repayment comes due on March 20.
In Switzerland, official data showed on Thursday that the country’s trade balance narrowed more-than-expected in December to CHF2.07 billion from CHF2.95 billion the previous month.
Analysts had expected the trade surplus to narrow to CHF2.85 billion in December.
The data came after a report showing that Swiss retail sales rose far less-than-expected in December, adding 0.6% after a 1.8% rise the previous month and disappointing expectation for a 1.6% increase.
A separate report showed that manufacturing activity in Switzerland unexpectedly deteriorated in January, contracting for the fourth consecutive month.
In the week ahead, investors will be watching developments in the euro zone, with European Leaders holding a string of meetings to discuss Greece’s bailout and the financial guarantees for the European Financial Stability Facility, the euro zone’s new bailout fund.
Meanwhile, the European Central Bank is to hold its policy setting meeting, but the bank is widely expected to keep rates on hold at 1%.
In the U.S., Fed Chairman Ben Bernanke is to testify before the Senate budget committee in Washington.
Ahead of the coming week, Forexpros has compiled a list of these and other significant events likely to affect the markets.
Monday, February 6
The Swiss National Bank is to publish a report on foreign currency reserves, which provides insight into the SNB’s currency market operations.
Tuesday, February 7
In the U.S., Fed Chairman Ben Bernanke is due to testify on the economic outlook and federal budget situation before the Senate Budget Committee in Washington.
Wednesday, February 8
The U.S. is to publish a government report on crude oil inventories.
Thursday, February 9
Switzerland is to produce a government report on consumer climate, an important indicator of consumer spending.
Later in the day, the U.S. is to publish government data on unemployment claims, an important signal of overall economic health.
Friday, February 10
Switzerland is to produce official data on consumer price inflation, which accounts for a majority of overall inflation.
The U.S. is to round up the week with official data on the country’s trade balance, as well as preliminary data from the University of Michigan on consumer sentiment and inflation expectations.
Later in the day, Fed Chairman Ben Bernanke is due to speak about the housing market at the 2012 National Association of Homebuilders International Builders show.
Forexpros
