Forex Pros – Last week saw the Swiss franc drop to an eight-day low against the U.S. dollar on Friday as risk appetite sharpened and after the U.S. government said the country’s economy grew more rapidly than previously estimated in the fourth quarter, boosting optimism about the recovery. Â
USD/CHF hit 0.9213 on Friday, the pair’s highest since March 15; the pair subsequently consolidated at 0.9195 by close of trade, dropping 1.9% over the week.
The pair is likely to find support at 0.9028, Thursday’s low and resistance at 0.9250, the high of March 15.
The U.S. Bureau of Economic Analysis said on Friday that fourth quarter gross domestic product came in stronger-than-expected, rising at an inflation-adjusted annual rate of 3.1%, more than the expected 2.9% gain.
Meanwhile, Philadelphia Federal Reserve Bank President Charles Plosser said consumer spending continued to expand at a “reasonably robust pace” and the labor market was improving. The overall economy, he said, had gained “significant strength and momentum” since the summer.
Also Friday, the Swiss National Bank said in its quarterly bulletin that the recent Middle East unrest had sparked a renewed appreciation of the franc against the dollar and euro.
The SNB also said that exports have lost “considerable momentum†over the past year, given the “continued strength†of the currency. The Swiss economy was expected to expand by nearly 2% in 2011, according to the central bank.
Earlier in the week, the Swiss Federal Statistics Office said on Tuesday that the nation’s trade surplus widened to CHF2.49 billion in February, more than the CHF 2.13 billion forecast surplus. The report said that exports rose by 4.2% in February, while imports increased by 0.3%.
In the week ahead the U.S. is to release key data on nonfarm payrolls as well as a closely-watched report on its unemployment rate, while Switzerland is to produce official data on retail sales. Also next week, markets will continue to monitor geopolitical tensions in the Middle East and North Africa.
Ahead of the coming week, Forex Pros has compiled a list of these and other significant events likely to affect the markets.
Monday
The U.S. is to kick off the week by releasing a flurry of data, with an industry report on pending home sales as well as official data on personal spending, personal income and personal consumption expenditures.
Tuesday
The U.S. is to publish data on consumer confidence compiled by the Conference Board as well as industry data on house prices, a leading indicator of the housing industry’s health.
Meanwhile, Switzerland is to publish the results of a consumption index, compiled by UBS.
Wednesday
The U.S. is 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.
Switzerland is to publish the results of an economic index, compiled by the KOF Economic Research Agency, designed to predict the direction of the economy over the following six months.
Thursday
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 a report on manufacturing activity in the in the Chicago area as well as official data on factory orders and natural gas inventories.
Friday
The U.S. is to round up the week with a string of data, including 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 and average hourly earnings.
In addition, the country is to release official data on construction spending and total vehicle sales, while the Institute for Supply Management is to publish a report on manufacturing activity.
Also Friday, Switzerland is to publish official data on manufacturing sector activity as well as a report on retail sales, the primary gauge of consumer spending, which accounts for the majority of overall economic activity.
ForexPros.com
