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Forex - USD/CHF weekly outlook: June 9 - 13

Published 06/08/2014, 06:22 AM
Updated 06/08/2014, 06:22 AM
Dollar rises against Swiss franc after U.S. jobs report - The dollar moved higher against the Swiss franc on Friday after data showing that the U.S. economy added jobs for a fourth straight month in May bolstered optimism over the broader economic recovery.

The Department of Labor reported that the U.S. economy added 217,000 jobs last month, just under expectations for jobs growth of 218,000, while April's figure was revised to 282,000.

The U.S. unemployment rate remained unchanged at a five-and-a-half year low of 6.3%.

USD/CHF was at 0.8934 late Friday, up 0.25% for the day. For the week, the pair was off 0.59%.

The pair is likely to find support at 0.8907, Thursday’s low and resistance at 0.9035, Thursday’s high and a four-month high.

The dollar briefly rallied to the highest level since February against the Swiss franc on Thursday, before erasing the day’s gains in choppy trade after the European Central Bank unveiled a package of measures to avert the threat of persistently low inflation in the euro area.

The ECB cut the main refinancing rate in the euro area to a record low 0.15% and imposed negative deposit rates on commercial lenders, in a bid to stimulate lending to businesses.

The ECB acted after a report showed that the annual rate of inflation in the euro zone slowed to 0.5% in May, far below the ECB’s target of close to but just under 2%.

EUR/CHF was at 1.2188 late Friday, recovering from three-week lows of 1.2165.

Also Friday, data showed that the annual rate of inflation in Switzerland rose 0.2% in May, the largest annual increase since the Swiss National Bank imposed a minimum exchange rate floor against the euro in September 2011.

On a month-over-month basis, Swiss consumer prices rose 0.3% in May.

In the week ahead, investors will be looking ahead to Thursday’s U.S. retail sales report for further indications on the strength of the U.S. recovery. Tuesday’s report on Swiss retail sales will also be closely watched.

Ahead of the coming week, has compiled a list of these and other significant events likely to affect the markets. The guide skips Monday and Wednesday, as there are no major events on these days.

Tuesday, June 10

Switzerland is to release data on retail sales, the government measure of consumer spending, which accounts for the majority of overall economic activity.

Thursday, June 12

The U.S. is to release the weekly report on initial jobless claims, in addition to data on retail sales and import prices.

Friday, June 13

The U.S. is to round up the week with data on producer price inflation and preliminary data on consumer sentiment from the University of Michigan.

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