Forexpros – The U.S. dollar ended the week sharply higher against the Swiss franc on Friday, as sustained concerns over the debt crisis in the euro zone and expectations of a new Swiss intervention to cap the franc boosted demand for the greenback.
USD/CHF hit 0.8959 on Tuesday, the pair’s highest since October 20; the pair subsequently consolidated at 0.8843 by close of trade on Friday, climbing 2.53% over the week.
The pair is likely to find support at 0.8567, the low of October 27 and resistance at 0.9082, the high of October 20.
The dollar found support on Friday after German Chancellor Angela Merkel said that few countries in the Group of 20 nations had committed to providing more resources for the euro zone’s rescue fund, adding to concerns over the handling of the region’s debt crisis.
Investors were also wary ahead of a government confidence vote in Greece, scheduled late Friday evening. Despite strong internal opposition, Papandreou’s government passed the vote by a very narrow margin.
Meanwhile, the Swissie remained vulnerable ahead of an upcoming speech by Swiss National Bank Chairman Philipp Hildebrand, amid speculation that the SNB is preparing to intervene once again in the foreign exchange market to curb the appreciation of the franc. Hildebrand warned on Sunday that the central bank is ready to take further measures to weaken the Swiss franc if necessary.
Also Friday, data showed that the U.S. unemployment rate ticked down unexpectedly in October to 9.0% from 9.1% the previous month. The data came after a report showing that non-farm employment rose less-than-expected by 80K in October.
The greenback rallied to an eight-day high against the Swissie on Tuesday, as market sentiment was hit after Greek Prime Minister George Papandreou announced a referendum on the country’s latest bailout program.
The dollar also found support after Federal Reserve Chairman Ben Bernanke said that “economic growth strengthened somewhat in the third quarter,” but also warned that
“significant downside risks” remain to the outlook.
In the week ahead, developments in Greece will remain in focus, as opposition parties are calling for early elections while George Papandreou is pushing for a cross-party government to implement the latest European aid package.
Investors will also be closely watching for a U.S. report on trade balance, as well as Swiss reports on consumer price inflation and consumer confidence.
Ahead of the coming week, Forex Pros has compiled a list of these and other significant events likely to affect the markets.
Monday, November 7
Switzerland is to publish an official report on consumer price inflation, which accounts for a majority of overall inflation.
Tuesday, November 8
Switzerland is to produce a government report on consumer climate, a key indicator of consumer spending and a leading gauge of overall economic activity.
Swiss National Bank Governing Board Chairman Philipp Hildebrand is also due to speak later in the day. His speech will be closely watched after Hildebrand warned on Sunday that the central bank is ready to take further measures to weaken the Swiss franc if necessary.
Wednesday, November 9
In the U.S., Federal Reserve Chairman Ben Bernanke is due to deliver welcoming remarks at the Federal Reserve Conference on Small Business and Entrepreneurship during an Economic Recovery. An official report on U.S. crude oil inventories is also to be released later Wednesday.
Thursday, November 10
The U.S. is also to release a report on trade balance as well as weekly data on unemployment claims. Later in the day, government reports are to be released on import prices and federal budget balance.
Friday, November 11
The U.S. is to round up the week with the University of Michigan’s preliminary report on consumer sentiment.
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