Forex Pros – The U.S. dollar closed the week slightly higher against the Swiss franc on Friday, but remained close to what Swiss National Bank Chairman Philipp Hildebrand called “extreme levels” amid concerns over the U.S. economic recovery.
USD/CHF hit 0.8346 on Tuesday, the pair’s lowest since June 8; the pair subsequently consolidated at 0.8479 by close of trade on Friday, rising 0.60% over the week.
The pair is likely to find support at 0.8325, the low of June 7 and the pair’s all-time low and resistance at 0.8550, Wednesday’s high and an almost three-week high.
On Thursday, the SNB said it was keeping its key interest rate and 2011 growth forecast unchanged, highlighting concerns over the strengthening Swiss franc.
“Since the Swiss franc also recorded historic exchange rates against other currencies, its value, on a real and trade-weighted basis, is now well above its long term level,” Hildebrand said.
This has led to “strong price competition” for the Swiss export industry.
The central bank maintained its forecast for growth at 2.0% due to “robust foreign demand.” The central bank also held monetary policy steady, holding its three-month Libor rate at 0.0 to 0.75%.
Meanwhile, the Swissie advanced to a record high against the euro on Thursday, before paring gains by the week’s end as risk aversion remained elevated amid concerns over Greece’s sovereign debt crisis.
In the week ahead, the Federal Reserve is to hold its policy setting meeting, which will be followed by a closely watched press conference by Fed Chairman Ben Bernanke. Investors are hoping that Bernanke will shed some light on the banks view of the need for further monetary easing.
Also next week, the SNB Chairman is to speak at an event in Zurich.
Ahead of the coming week, Forex Pros has compiled a list of these and other significant events likely to affect the markets. The guide skips Monday, as there are no relevant events on this day.
Tuesday, June 21
The U.S. is to release a report on existing home sales, a leading indicator of economic health.
Later in the day, SNB Chairman Philipp Hildebrand is to speak in Zurich; his comments will be closely watched for clues to the future possible direction of monetary policy.
Wednesday, June 22
The ZEW Centre for Economic Research is to publish a report on Swiss economic expectations, an important indicator of economic health.
Later Wednesday, the Federal Reserve is to announce its federal funds rate. The announcement will be followed with a press conference by Fed Chairman Ben Bernanke to discuss the bank’s rate statement.
Thursday, June 23
Switzerland is to publish a report on its trade balance, the difference in value between imported and exported goods and services.
Later in the day, the U.S. is to publish government data on initial jobless claims, as well as official data on new home sales, both leading indicators of economic health.
Friday, June 24
The U.S. is to round up the week with official data on durable goods orders, a leading indicator of production, as well revised data on first quarter gross domestic product, the broadest measure of economic activity and the primary gauge of the economy’s health.
Meanwhile, the SNB is to publish its quarterly bulletin.
ForexPros.com
