Investing.com - The U.S. dollar was steady close to two-year lows against the Swiss franc on Friday as expectations for a small reduction in the scale of the Federal Reserve’s stimulus program mounted ahead of this week’s policy meeting.
USD/CHF hit session highs of 0.8918 and was last up 0.01% to 0.8890.
The pair is likely to find support at 0.8839, Wednesday’s low and a two-year low and resistance at 0.8983, the high of December 6.
Expectations for a small reduction in the pace of the Fed’s USD85 billion-a-month asset purchase program at its upcoming policy meeting were boosted after stronger-than-forecast U.S. retail sales data for November released on Thursday added to signs that the economic recovery is deepening.
An agreement on a two-year U.S. budget deal was also seen as removing an obstacle to the winding back of monetary stimulus.
The dollar came off highs after data showing that U.S. producer price inflation fell 0.1% in November sparked concerns over the sluggish inflation outlook.
The soft inflation data did little to alter expectations that the Fed will begin withdrawing stimulus in the next few months after the latest U.S. nonfarm payrolls report showed that the U.S. economy added more jobs than expected in November.
The Swiss National Bank maintained the minimum exchange rate on the franc at 1.20 per euro and its benchmark interest rate at zero, following its final policy meeting of 2013 on Thursday, as widely expected.
The Swiss franc is “still high” the bank said. The SNB kept its forecast for economic growth unchanged, saying it expects growth of between of between 1.5% and 2% in 2013. For 2014, the SNB sees growth of around 2%.
“Given the vulnerable economic situation abroad, downside risks still prevail for Switzerland,” said SNB Chairman Thomas Jordan.
In the week ahead, investors will be focusing on Wednesday’s outcome of the Fed’s monthly policy meeting, and a press conference with Chairman Ben Bernanke will be closely watched.
The euro zone is to release data on manufacturing and service sector activity, while the ZEW index of German economic sentiment will be keenly awaited. In addition the BoJ is to hold what will be its final policy meeting of the year.
Ahead of the coming week, Investing.com has compiled a list of these and other significant events likely to affect the markets.
Monday, December 16
The U.S. is to release reports on industrial production, manufacturing activity in the New York region and the balance of foreign and domestic investment in U.S. securities.
Tuesday, December 17
The U.S. is to release data on consumer inflation and the current account.
Wednesday, December 18
The ZEW Institute is to publish a report on economic expectations in Switzerland, a leading indicator of economic health.
The U.S. is to release data on building permits, a leading indicator of future construction activity, and housing starts.
The Federal Reserve is to announce its federal funds rate and publish its rate statement, which outlines economic conditions and the factors affecting the monetary policy decision. The U.S. central bank is also to publish its economic projections for the next two years. The rate announcement is to be followed by a press conference with Chairman Ben Bernanke.
Thursday, December 19
The U.S. is to publish data on existing home sales, manufacturing activity in the Philadelphia region and initial jobless claims.
Friday, December 20
The U.S. is to round up the week with revised data on third quarter GDP.
USD/CHF hit session highs of 0.8918 and was last up 0.01% to 0.8890.
The pair is likely to find support at 0.8839, Wednesday’s low and a two-year low and resistance at 0.8983, the high of December 6.
Expectations for a small reduction in the pace of the Fed’s USD85 billion-a-month asset purchase program at its upcoming policy meeting were boosted after stronger-than-forecast U.S. retail sales data for November released on Thursday added to signs that the economic recovery is deepening.
An agreement on a two-year U.S. budget deal was also seen as removing an obstacle to the winding back of monetary stimulus.
The dollar came off highs after data showing that U.S. producer price inflation fell 0.1% in November sparked concerns over the sluggish inflation outlook.
The soft inflation data did little to alter expectations that the Fed will begin withdrawing stimulus in the next few months after the latest U.S. nonfarm payrolls report showed that the U.S. economy added more jobs than expected in November.
The Swiss National Bank maintained the minimum exchange rate on the franc at 1.20 per euro and its benchmark interest rate at zero, following its final policy meeting of 2013 on Thursday, as widely expected.
The Swiss franc is “still high” the bank said. The SNB kept its forecast for economic growth unchanged, saying it expects growth of between of between 1.5% and 2% in 2013. For 2014, the SNB sees growth of around 2%.
“Given the vulnerable economic situation abroad, downside risks still prevail for Switzerland,” said SNB Chairman Thomas Jordan.
In the week ahead, investors will be focusing on Wednesday’s outcome of the Fed’s monthly policy meeting, and a press conference with Chairman Ben Bernanke will be closely watched.
The euro zone is to release data on manufacturing and service sector activity, while the ZEW index of German economic sentiment will be keenly awaited. In addition the BoJ is to hold what will be its final policy meeting of the year.
Ahead of the coming week, Investing.com has compiled a list of these and other significant events likely to affect the markets.
Monday, December 16
The U.S. is to release reports on industrial production, manufacturing activity in the New York region and the balance of foreign and domestic investment in U.S. securities.
Tuesday, December 17
The U.S. is to release data on consumer inflation and the current account.
Wednesday, December 18
The ZEW Institute is to publish a report on economic expectations in Switzerland, a leading indicator of economic health.
The U.S. is to release data on building permits, a leading indicator of future construction activity, and housing starts.
The Federal Reserve is to announce its federal funds rate and publish its rate statement, which outlines economic conditions and the factors affecting the monetary policy decision. The U.S. central bank is also to publish its economic projections for the next two years. The rate announcement is to be followed by a press conference with Chairman Ben Bernanke.
Thursday, December 19
The U.S. is to publish data on existing home sales, manufacturing activity in the Philadelphia region and initial jobless claims.
Friday, December 20
The U.S. is to round up the week with revised data on third quarter GDP.