Investing.com - The euro touched fresh 12-year lows against the dollar on Friday pressured lower by the prospects of quantitative easing by the European Central Bank, but pushed higher against the Swiss franc, one day after suffering its largest ever single-day decline against the currency.
EUR/USD was down 0.55% at 1.1567 in late trade on Friday, after falling to lows of 1.1461 earlier in the day, the weakest since November 2003.
The diverging monetary policy stance between the Federal Reserve, which is poised to raise interest rates and central banks in Europe and Japan, has seen the dollar strengthen broadly in recent months.
EUR/CHF was trading at 0.9930 late Friday, up 1.75% for the day after falling to all-time lows of 0.8696 on Thursday. The pair still ended the week down more than 17%.
The euro posted its biggest ever one day drop against the Swiss franc on Thursday after the SNB surprised markets by abandoning the 1.20 per euro exchange rate cap it imposed in September 2011.
SNB Chairman Thomas Jordan said Thursday the cap had “protected the Swiss economy from serious harm” but added that maintaining the policy was not “sustainable or sensible in the long term.”
“The euro has depreciated considerably against the U.S. dollar and this, in turn, has caused the Swiss franc to weaken against the U.S. dollar. In these circumstances, the SNB concluded that enforcing and maintaining the minimum exchange rate for the Swiss franc against the euro is no longer justified,” the central bank said.
The SNB also cut interest rates deeper into negative territory, a move intended to make the franc less attractive to investors.
The move indicated that the Swiss central bank sees a high likelihood that the ECB will implement full blown quantitative easing measures at its upcoming meeting on Thursday.
An interim ruling last Wednesday, which is likely to be accepted by the European Court of Justice, said the ECB was free to pursue a bond purchasing program without legal challenge.
In the week ahead, investors will be focusing on Thursday’s outcome of the ECB’s policy meeting and the bank’s post policy meeting press conference will be closely watched.
Ahead of the coming week, Investing.com has compiled a list of these and other significant events likely to affect the markets.
Monday, January 19
Switzerland is to release data on producer price inflation.
In the euro zone, Germany’s Bundesbank is to publish its monthly report.
U.S. markets will remain closed for the Martin Luther King Day holiday.
Tuesday, January 20
The ZEW Institute is to release its closely watched report on German economic sentiment, a leading indicator of economic health.
Wednesday, January 21
The U.S. is to release data on building permits and housing starts.
Thursday, January 22
Spain is to release data on the unemployment rate.
The ECB is to announce its benchmark interest rate. The rate announcement will be followed by a post-policy meeting press conference with President Mario Draghi.
The U.S. is to release data on initial jobless claims.
Friday, January 23
The euro zone is to publish preliminary data on private sector activity, while Germany and France are to also to publish data on private sector growth.
The U.S. is to round up the week with preliminary data on manufacturing activity and a private sector report on existing home sales.