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Forex - USD/CHF weekly outlook: December 6-10

Published 12/05/2010, 06:48 AM
USD/CHF
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Investing.com – Last week saw the U.S. dollar plunge to a 3-week low against the Swiss franc on Friday, following the release of significantly worse-than-expected U.S. data on employment.

USD/CHF hit 0.9724 on Friday, the pair’s lowest since November 11; the pair subsequently consolidated at 0.9732 by close of trade, plummeting 2.90% over the week.

The pair is likely to find support at 0.9670, the low of November 11 and resistance at 0.9949, last Friday’s high.

Labor Department data showed U.S. non-farm payrolls rose 39,000 last month, much weaker than expectations for 140,000 new jobs. The unemployment rate also increased to 9.8%, close to a 26-year high.

Also last week, official data showed that Swiss gross domestic product growth slowed in the third quarter, although robust domestic demand helped offset the drag exerted on the country's exporters from the strong Swiss franc.

The State Secretariat for Economic Affairs on Thursday said the Swiss economy expanded 0.7% on a quarterly basis, compared with a lowered estimate of 0.8% in the previous quarter, and 3% annually from 2.8% in the second quarter.

The Swiss government's Chief Economist Aymo Brunett said the third-quarter GDP performance was pleasing, though the slowdown in exports was less so. Mr. Brunetti also said the franc will continue to exert a brake on Switzerland's export growth as long as it remains at current levels.

Next week, the U.S. is to release key weekly data on initial jobless claims, as well as a report on the country’s trade balance and preliminary data on consumer sentiment. Meanwhile, Federal Reserve Chairman, Ben Bernanke, is to appear in a televised interview.

Elsewhere, Switzerland is to release official data on the country’s unemployment rate.

Ahead of the coming week, Investing.com has compiled a list of these and other significant events likely to affect the markets.

Monday, December 6

In the U.S., Federal Reserve Chairman, Ben Bernanke is due to speak about monetary policy in an interview to be aired on CBS. The interview was given a week earlier.

Tuesday, December 7

The U.S. is to publish the IBD/TIPP index of economic optimism while later in the day the country is to publish official data on consumer credit.

Meanwhile, Switzerland is to publish official data on the country’s unemployment rate, an important indicator of economic health.

Wednesday, December 8

The U.S. is to publish official data on crude oil inventories.

Thursday, December 9

The U.S. is to release key weekly data on initial jobless claims, a leading indicator of economic health, as well as reports on wholesale inventories and natural gas storage.

Friday, December 10

The U.S. is to round up the week with official data on its trade balance, federal budget balance and import prices. The country is also set to publish preliminary data from the University of Michigan on consumer sentiment and inflation expectations.

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