Forex Pros — The U.S. dollar rebounded from a record low against the Swiss franc last week, as investors embraced higher-yielding currencies after Greece’s parliament approved an austerity package and averted the euro zone’s first sovereign debt default.
USD/CHF hit 0.8274 on Tuesday, the pair’s all-time low; the pair subsequently consolidated at 0.8472 by close of trade on Friday, jumping 1.73% over the week
The pair is likely to find support at 0.8296, Wednesday’s low and resistance at 0.8550, the high of June 15 and a three-week high.
Risk appetite recovered after Greece’s parliament approved two bills to authorize a EUR28.4 billion, five-year austerity package needed to secure a EUR12 billion tranche of bailout funds from the European Union and International Monetary Fund.
Sentiment was also bolstered after German lenders agreed to roll over Greek bond holdings maturing through 2014.
The dollar pushed higher on Friday after the U.S. Institute for Supply Management said its June manufacturing index came in at 55.3, well above the 51.5 forecast, marking the 23rd consecutive month of growth.
But the greenback pared gains after a report showing that construction spending hit an almost 12-year low in May, reinforcing expectations that the Federal Reserve will keep interest rates on hold for some time to come.
Earlier in the week, a report showing that Switzerland’s KOF economic barometer fell in June added to concerns that the franc’s record gains were weighing on economic growth.
In the week ahead, the main focus is likely to be on U.S. reports on service sector growth and June non-farm payrolls, while Switzerland is to publish official data on retail sales.
Ahead of the coming week, Forex Pros has compiled a list of these and other significant events likely to affect the markets.
Monday, July 4
Switzerland is also to publish official data on retail sales, the primary gauge of consumer spending, which accounts for the majority of overall economic activity. Later in the day, Swiss National Bank Chairman Philipp Hildebrand is to speak; his comments will be closely watched for any clues to the future direction of monetary policy.
Meanwhile, markets in the U.S. are to remain closed for Independence Day.
Tuesday, July 5
The U.S. is to publish government data on factory orders, a leading indicator of production.
Wednesday, July 6
The U.S. Institute of Supply Management is to publish a report on service sector growth, a leading indicator of economic health.
Thursday, July 7
Switzerland is to publish official data on consumer price inflation, which accounts for a majority of overall inflation.
In the U.S., payroll processing firm ADP is to publish a report on non-farm payrolls, which leads government data by one day. The U.S. is also to release a weekly report on initial jobless claims, the nation’s earliest economic data.
Friday, July 8
The U.S. is to round up the week with government reports on average hourly earnings, a leading indicator of consumer inflation, as well as official data on non-farm payrolls and the country’s overall unemployment rate.
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