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Forex - USD/CHF weekly outlook: January 20 - 24

Published 01/19/2014, 06:34 AM
Dollar gains ground against Swiss franc
USD/CHF
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EUR/CHF
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Investing.com - The U.S. dollar rose to one-week highs against the Swiss franc on Friday as a batch of mixed U.S. data indicated that the economic recovery is likely to continue to gain momentum going into this year.

USD/CHF rose as high as 0.9120, the highest since January 9 and settled at 0.9100, 0.60% higher for the day. For the week, the pair gained 1.20%.

The pair was likely to find support at 0.9031, Thursday’s low and resistance at 0.9126, the high of January 8.

Data released on Friday showed that U.S. industrial production rose 0.3% in December, in line with expectations, rising for the fifth successive month.

Another report showed that U.S. housing starts fell 9.8% last month, more than the 8.3% decline forecast by analysts. U.S. building permits rose less-than-expected in December, but remained close to November’s five year highs.

Separately, data showed that the University of Michigan's consumer sentiment index ticked down to 80.4 in January from 82.5 in December. Analysts had expected the index to rise to 83.5.

Earlier in the week, data showed that U.S. retail sales posted a larger than expected gain in December.

The data indicated that while the recovery in the U.S. remains uneven, the economic outlook is continuing to improve. The dollar has strengthened broadly since the Fed announced its decision in December to scale back its asset purchase program, cutting it by USD10 million, to USD75 billion-per-month.

Swiss National Bank Chairman Thomas Jordan said Thursday that the minimum exchange rate floor of 1.20 francs to the euro is likely to remain the focus of monetary policy for some time to come, as the value of the franc remains high.

The euro was little changed against the Swiss franc on Friday. EUR/CHF touched session highs of 1.2335, and was last up 0.02% to 1.2322.

In the week ahead, U.S. data on jobless claims and home sales 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. The guide skips Tuesday and Friday as there are no relevant events on these days.

Monday, January 20

Markets in the U.S. are to remain closed for the Martin Luther King Day holiday.

Wednesday, January 22

The ZEW Institute is to publish a report on economic expectations in Switzerland, a leading indicator of economic health.

Thursday, January 23

The U.S. is release the weekly report on initial jobless claims and a private sector report on existing home sales.

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