Forexpros – The U.S. dollar eased off a 19-month high against the Swiss franc on Friday, as market sentiment found support after Chinese economic growth figures met expectations, but sustained concerns over the euro zone debt crisis supported demand for the greenback.
USD/CHF hit 0.9872 on Friday, the pair’s highest since early December 2010; the pair subsequently consolidated at 0.9802 by close of trade, up 0.09% on the week.
The pair is likely to find support at 0.9736, the low of July 10 and resistance at 0.9872, Friday’s high and a 19-month peak.
Investor confidence was boosted Friday after data showed that China’s gross domestic product expanded 7.6% in the second quarter, in line with expectations.
But investors remained cautious after ratings agency Moody’s downgraded Italy’s sovereign debt rating late Thursday, citing doubts over the government’s ability to enact badly-needed reforms.
Despite the downgrade, Italy managed to successfully auction the maximum EUR 5.25 billion of two and five-year bonds on Friday, but the yield on the country’s 10-year bonds climbed above 6% following the auction.
In the U.S., data on Friday showed that consumer confidence unexpectedly dropped to the lowest level in seven months in July.
The University of Michigan said its index of consumer sentiment fell to a seasonally adjusted 72.0, from 73.2 in June, confounding expectations for an increase to 73.4.
A separate report showed that U.S. producer price inflation ticked up 0.1% in July, against expectations for a 0.5% decline.
The data came after Wednesday’s minutes from the Federal Reserve’s June meeting showed that few policymakers believed more asset purchases would be necessary to support growth in the economy.
In the week ahead, investors will be focusing on testimony by Federal Reserve Chairman Ben Bernanke, amid speculation over the possibility of more quantitative easing from the central bank.
Ahead of the coming week, Forexpros has compiled a list of these and other significant events likely to affect the markets. The guide skips Friday, as there are no relevant events on this day.
Monday, July 16
Switzerland is to publish official data on industrial production, an important indicator of economic health.
The U.S. is to publish official data on retail sales, the foremost indicator of consumer spending, which accounts for the majority of overall economic activity. The country is also to release official data on business inventories and manufacturing activity in New York.
Tuesday, July 17
The U.S. is to publish official data on consumer price inflation, as well as reports on the capacity utilization rate and industrial production. In addition, Federal Reserve Chairman Ben Bernanke is to testify on the on the bank’s monetary policy report before the Senate Banking Committee in Washington.
Wednesday, July 18
Switzerland is to publish a ZEW report on economic expectations, a key indicator of economic health.
The U.S. is to publish official data on building permits, an excellent gauge of future construction activity, as well as a report on housing starts. The country is also to release government data on crude oil stockpiles.
Meanwhile, Federal Reserve Chairman Ben Bernanke is to testify for a second day on the on the bank’s monetary policy report before the Senate Banking Committee in Washington.
Thursday, July 19
Switzerland is to publish official data on the trade balance, the difference in value between imports and exports.
The U.S. is to round up the week with government data on initial jobless claims, as well as reports on existing home sales and manufacturing activity in Philadelphia.
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