Investing.com - The U.S. dollar ended the week lower against the Swiss franc on Friday, as soft U.S. inflation data fuelled concerns that the Federal Reserve could maintain an easing policy, while the franc remained supported after the Swiss National Bank kept monetary policy unchanged last week.
USD/CHF hit 0.9333 on Thursday, the pair’s highest since January 25; the pair subsequently consolidated at 0.9152 by close of trade on Friday, slipping 0.45% on the week.
The pair is likely to find support at 0.9078, the low of March 9 and resistance at 0.9253, Friday’s high.
The dollar added to the previous session’s losses against the Swiss franc on Friday, after the Department of Labor said consumer price inflation rose 0.4% in February, in line with expectations, fueled largely by pricier gasoline.
Core inflation rates, which are stripped of volatile food and energy prices, rose 0.1%, below expectations for a gain of 0.2%.
The soft data fuelled speculation that the Federal Reserve could maintain a policy of economic stimulus, which would dilute the greenback.
Sentiment on the greenback was further hit after industrial production numbers came in flat in February, below expectations for a 0.4% gain, while the University of Michigan’s consumer confidence index also disappointed, coming in at 74.3, below expectations for a reading of 75.7.
The Swiss franc found support against the dollar and the euro on Thursday, after the Swiss National Bank kept its minimum exchange rate floor of 1.20 per euro unchanged.
In its quarterly monetary policy statement, the SNB reiterated its pledge to defend the exchange rate floor with the “utmost determination," saying it was ready to buy foreign currency in unlimited quantities.
The exchange rate cap was introduced last September as the appreciation of the Swiss franc undermined exports and increased the risk of deflation.
The central bank also said that there are increasing signs that the Swiss economy is stabilizing and doubled its forecast for economic growth for this year to "around 1.0%".
The greenback had rallied to its highest level against the franc since January earlier in the week, as investors trimmed back expectations for another round of quantitative easing from the Fed after the central bank upgraded its outlook on the economy and acknowledged the recent improvement in the labor market.
However, policymakers reiterated their intention to keep the benchmark interest rate unchanged at a record low through late 2014 and warned that risks to the economic recovery still remained.
In the week ahead, the U.S. is to release a flurry of data on the housing sector, which investors will be watching closely to gauge the strength of the economic recovery. Meanwhile, Switzerland is to publish official data on industrial production.
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 Monday, as there are no relevant events on this day.
Tuesday, March 20
Switzerland is to produce government data on industrial production, a leading indicator of economic health.
The U.S. is to produce official data on building permits, an excellent gauge of future construction activity, as well as data on housing starts, a leading indicator of economic health. Also Tuesday, Fed Chairman Ben Bernanke is to speak at an event in Washington; his comments will be closely watched for possible indications on the future direction of monetary policy.
Wednesday, March 21
The U.S. is to release industry data on existing home sales, a leading indicator of economic health, as well as official data on crude oil stockpiles.
Thursday, March 22
Switzerland is to release government data on the trade balance, the difference in value between imports and exports over the month.
The U.S. is to publish official data on initial jobless claims, a leading indicator of economic health. Also Thursday, Fed Chairman Ben Bernanke is to speak at an event in Washington; his comments will be closely watched for possible indications on the future direction of monetary policy.
Friday, March 23
The U.S. is to round up the week with official data on new home sales, a leading indicator of economic health.
USD/CHF hit 0.9333 on Thursday, the pair’s highest since January 25; the pair subsequently consolidated at 0.9152 by close of trade on Friday, slipping 0.45% on the week.
The pair is likely to find support at 0.9078, the low of March 9 and resistance at 0.9253, Friday’s high.
The dollar added to the previous session’s losses against the Swiss franc on Friday, after the Department of Labor said consumer price inflation rose 0.4% in February, in line with expectations, fueled largely by pricier gasoline.
Core inflation rates, which are stripped of volatile food and energy prices, rose 0.1%, below expectations for a gain of 0.2%.
The soft data fuelled speculation that the Federal Reserve could maintain a policy of economic stimulus, which would dilute the greenback.
Sentiment on the greenback was further hit after industrial production numbers came in flat in February, below expectations for a 0.4% gain, while the University of Michigan’s consumer confidence index also disappointed, coming in at 74.3, below expectations for a reading of 75.7.
The Swiss franc found support against the dollar and the euro on Thursday, after the Swiss National Bank kept its minimum exchange rate floor of 1.20 per euro unchanged.
In its quarterly monetary policy statement, the SNB reiterated its pledge to defend the exchange rate floor with the “utmost determination," saying it was ready to buy foreign currency in unlimited quantities.
The exchange rate cap was introduced last September as the appreciation of the Swiss franc undermined exports and increased the risk of deflation.
The central bank also said that there are increasing signs that the Swiss economy is stabilizing and doubled its forecast for economic growth for this year to "around 1.0%".
The greenback had rallied to its highest level against the franc since January earlier in the week, as investors trimmed back expectations for another round of quantitative easing from the Fed after the central bank upgraded its outlook on the economy and acknowledged the recent improvement in the labor market.
However, policymakers reiterated their intention to keep the benchmark interest rate unchanged at a record low through late 2014 and warned that risks to the economic recovery still remained.
In the week ahead, the U.S. is to release a flurry of data on the housing sector, which investors will be watching closely to gauge the strength of the economic recovery. Meanwhile, Switzerland is to publish official data on industrial production.
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 Monday, as there are no relevant events on this day.
Tuesday, March 20
Switzerland is to produce government data on industrial production, a leading indicator of economic health.
The U.S. is to produce official data on building permits, an excellent gauge of future construction activity, as well as data on housing starts, a leading indicator of economic health. Also Tuesday, Fed Chairman Ben Bernanke is to speak at an event in Washington; his comments will be closely watched for possible indications on the future direction of monetary policy.
Wednesday, March 21
The U.S. is to release industry data on existing home sales, a leading indicator of economic health, as well as official data on crude oil stockpiles.
Thursday, March 22
Switzerland is to release government data on the trade balance, the difference in value between imports and exports over the month.
The U.S. is to publish official data on initial jobless claims, a leading indicator of economic health. Also Thursday, Fed Chairman Ben Bernanke is to speak at an event in Washington; his comments will be closely watched for possible indications on the future direction of monetary policy.
Friday, March 23
The U.S. is to round up the week with official data on new home sales, a leading indicator of economic health.