Forexpros – Last week saw the U.S. dollar rise to a five-week high against the Swiss franc before paring some of the week’s gains as market sentiment improved amid hopes for progress in dealing with the euro zone’s debt crisis.
USD/CHF hit 0.9151 on Thursday, the pair’s highest since October 10; the pair subsequently consolidated at 0.8996 by close of trade on Friday, jumping 1.40% over the week.
The pair is likely to find support at 0.8867, the low of November 7 and resistance at 0.9151, the high of November 10.
The dollar came under pressure on Friday as risk sentiment recovered after Italy’s Parliament approved an amendment to the country’s 2012 budget, paving the way for the resignation of Prime Minister Silvio Berlusconi on Saturday.
Also Friday, incoming Greek Prime Minister Lucas Papademos and his cabinet were sworn in. Papademos will implement the country’s latest EUR130 billion bailout before leading the country to early elections.
Elsewhere, preliminary data showing that U.S. consumer sentiment rose to its highest level in five months this month contributed to stronger risk appetite.
The University of Michigan’s consumer sentiment index rose to a seasonally adjusted 64.2, from 60.9 in October, outstripping forecasts for an increase to 61.0.
The greenback rallied against the Swissie on Wednesday as yields on 10-year Italian bonds rose above the 7% level that prompted Greece, Ireland, and Portugal to seek international bailouts.
Earlier in the week, the Swiss franc turned lower against the greenback after Swiss National Bank Vice Chairman Thomas Jordan said that the recent introduction of the minimum exchange rate of 1.20 per euro was simply an attempt to curb the appreciation of the franc and protect Switzerland’s economy.
In the week ahead, investors will continue to closely monitor developments in the euro zone as talks on the formation of an emergency government in Italy get started.
Also next week, the U.S. is to release data on retail sales, housing and inflation, while the ZEW Centre for Economic Research is to publish a report on economic expectations in Switzerland.
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 Friday, as there are no relevant events on this day.
Monday, November 14
Switzerland is to produce a government report on producer price inflation.
Tuesday, November 15
The U.S. is to produce a flurry of economic data with reports on retail sales, producer price inflation, business inventories and a report on manufacturing activity in New York State.
Wednesday, November 16
The U.S. is to publish data on consumer inflation, as well as data on industrial production, the capacity utilization rate, crude oil stockpiles and the balance of foreign and domestic investment in long-term securities.
Thursday, November 17
The ZEW Centre for Economic Research is to publish a report on economic expectations in Switzerland.
Also Thursday, the U.S. is to publish its weekly report on initial jobless claims, as well as data on building permits, an excellent gauge of future construction activity and housing starts. The country is also to release a report on manufacturing activity in Philadelphia, a leading indicator of economic health.
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