Forexpros – The U.S. dollar fell sharply against the Swiss franc on Friday, down for the third consecutive day after official data showed that the U.S. economy added no jobs last month, fanning speculation over a fresh round of stimulus by the Federal Reserve.
USD/CHF hit 0.7710 on Friday, the pair’s lowest since August 12; the pair subsequently consolidated at 0.7880 by close of trade on Friday, tumbling 2.33% over the week.
The pair is likely to find support at 0.7547, the low of August 12 and resistance at 0.8087, last Thursday’s high.
The Department of Labor said U.S. non-farm payrolls were unchanged last month, the weakest reading since September 2010, after rising by a downwardly revised 85,000 in July. Economists had expected non-farm payrolls to rise by 74,000 in August. The jobless rate remained unchanged at 9.1%.
The Swiss franc strengthened amid expectations that the Fed will embark on a third round of monetary easing, to shore up U.S. growth.
Last week, Fed Chairman Ben Bernanke said that the central bank’s September policy-setting meeting would be extended from one day to two, in order to give policymakers time to examine their options.
But investors remained wary of pushing the Swissie too high as the continued threat of intervention by the Swiss National Bank to rein in the appreciation of the currency lingered.
Early last month, Switzerland’s central bank slashed interest rates to near zero, saying the currency was “massively overvalued.â€
On Friday, the Swiss government issued a statement declaring that all parties stood behind the SNB’s actions and asserting that the central bank was solely responsible for currency policy.
The statement came after the government pledged CHF870 million as part of a stimulus program to help offset the economic impact of the strong franc.
The euro also ended the week sharply lower against the Swissie amid concerns that the region’s sovereign debt crisis is deepening. On Friday, negotiations over fresh bailout funds for Greece were suspended after the country failed to meet deficit reduction targets.
In the week ahead, investors will be looking to a speech by U.S. President Barack Obama to Congress on Thursday, for indications on how he plans to boost job creation.
Meanwhile, the European Central Bank is to announce its benchmark interest rate on Thursday, but recent comments by ECB President Jean-Claude Trichet indicated that rates may remain on hold in the coming months.
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, September 5
Markets in the U.S. are to remain closed for the Labor Day holiday, which marks the traditional end of summer.
Tuesday, September 6
Switzerland is to release official data on consumer price inflation, which accounts for a majority of overall inflation.
In the U.S., the Institute of Supply Management is to produce a report on service sector activity, a leading indicator of economic health.
Wednesday, September, 7
In the U.S., Federal Reserve Bank of Chicago President Charles Evans is to speak. His comments will be closely watched for clues to the future direction of monetary policy. The Fed is also to publish its beige book, which looks at regional economic conditions.
Thursday, September 8
The U.S. is to publish its weekly report on initial jobless claims, as well as official data on the trade balance and crude oil stockpiles.
Also Thursday, U.S. President Barack Obama is to make a speech to Congress, outlining how he intends to stimulate employment creation and lower unemployment, as part of his jobs plan.
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