Investing.com – The U.S. dollar was higher against the Swiss franc on Friday, paring the week’s losses as demand for the greenback was bolstered amid ongoing concerns over the debt crisis in the euro zone.
USD/CHF hit 0.8646 on Thursday, the pair’s lowest since September 8; the pair subsequently consolidated at 0.8754 by close of trade on Friday, shedding 1.36% over the week.
The pair is likely to find support at 0.8569, the low of September 8 and resistance at 0.8927, Monday’s high and a four-month high.
Concerns over the debt crisis in the euro zone intensified on Friday after a meeting of European Union finance ministers failed to reach an agreement over Finland’s demand that Greece provide collateral in exchange for further bailout funds.
The dollar weakened against its major counterparts on Thursday, after the European Central Bank announced that it would provide additional dollar liquidity to euro area banks in a move coordinated with the Federal Reserve and other central banks.
The move eased concerns over funding shortages among European lenders, who have had difficulty borrowing dollars due to the region’s debt crisis and as a result have had to depend more heavily on the ECB for loans.
The dollar was also hit after government data showed that U.S. retail sales were unchanged in August, following a smaller-than-expected 0.3% gain in July, while a separate report showed that U.S. jobless claims rose more-than-expected.
Other reports showed that U.S. consumer prices rose slightly more than expected last month while manufacturing activity in New York contracted unexpectedly.
Elsewhere Thursday, the Swiss National Bank left its interest rate close to zero in a widely expected decision. The central bank reiterated its pledge to defend the minimum targeted rate of 1.20 per euro, set on September 6 and said that if it were not for the exchange rate cap, "there would be a substantial threat of recession."
The bank said it was forecasting growth to reach between 1.5% and 2% in 2011, slightly weaker than the 2% growth it forecast in June.
The euro ended the week slightly higher against the Swissie, but the pair remained close to the minimum exchange rate target with EUR/CHF easing up 0.18% to hit 1.2081 by close of trade on Friday.
In the week ahead, investors will be watching the outcome of the Federal Reserve’s extended policy setting meeting on Wednesday for any signs that the bank is looking at providing fresh monetary stimulus to support the economy, while developments in the euro zone also look likely to remain in focus.
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 and Friday, as there are no relevant events on these days.
Tuesday, September 20
Switzerland’s State Secretariat for Economic Affairs is to publish economic forecasts, while the country is also to publish official data on the trade balance, the difference in value between imports and exports over the month.
Also Tuesday, the U.S. is to publish government data on building permits, an excellent gauge of future construction activity, as well as a report on housing starts, a leading indicator of economic health.
Wednesday, September 21
The U.S. is to publish industry data on existing home sales as well as a government report on crude oil inventories. In addition, the Federal Reserve is to announce the federal funds rate. The banks’ rate statement will be closely watched by investors for any clues to the future direction of monetary policy.
Thursday, September 22
The ZEW Centre for Economic Research is to release a report on economic sentiment in Switzerland, a leading indicator of economic health.
Later in the day, the U.S. is to publish its weekly report in initial jobless claims.
USD/CHF hit 0.8646 on Thursday, the pair’s lowest since September 8; the pair subsequently consolidated at 0.8754 by close of trade on Friday, shedding 1.36% over the week.
The pair is likely to find support at 0.8569, the low of September 8 and resistance at 0.8927, Monday’s high and a four-month high.
Concerns over the debt crisis in the euro zone intensified on Friday after a meeting of European Union finance ministers failed to reach an agreement over Finland’s demand that Greece provide collateral in exchange for further bailout funds.
The dollar weakened against its major counterparts on Thursday, after the European Central Bank announced that it would provide additional dollar liquidity to euro area banks in a move coordinated with the Federal Reserve and other central banks.
The move eased concerns over funding shortages among European lenders, who have had difficulty borrowing dollars due to the region’s debt crisis and as a result have had to depend more heavily on the ECB for loans.
The dollar was also hit after government data showed that U.S. retail sales were unchanged in August, following a smaller-than-expected 0.3% gain in July, while a separate report showed that U.S. jobless claims rose more-than-expected.
Other reports showed that U.S. consumer prices rose slightly more than expected last month while manufacturing activity in New York contracted unexpectedly.
Elsewhere Thursday, the Swiss National Bank left its interest rate close to zero in a widely expected decision. The central bank reiterated its pledge to defend the minimum targeted rate of 1.20 per euro, set on September 6 and said that if it were not for the exchange rate cap, "there would be a substantial threat of recession."
The bank said it was forecasting growth to reach between 1.5% and 2% in 2011, slightly weaker than the 2% growth it forecast in June.
The euro ended the week slightly higher against the Swissie, but the pair remained close to the minimum exchange rate target with EUR/CHF easing up 0.18% to hit 1.2081 by close of trade on Friday.
In the week ahead, investors will be watching the outcome of the Federal Reserve’s extended policy setting meeting on Wednesday for any signs that the bank is looking at providing fresh monetary stimulus to support the economy, while developments in the euro zone also look likely to remain in focus.
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 and Friday, as there are no relevant events on these days.
Tuesday, September 20
Switzerland’s State Secretariat for Economic Affairs is to publish economic forecasts, while the country is also to publish official data on the trade balance, the difference in value between imports and exports over the month.
Also Tuesday, the U.S. is to publish government data on building permits, an excellent gauge of future construction activity, as well as a report on housing starts, a leading indicator of economic health.
Wednesday, September 21
The U.S. is to publish industry data on existing home sales as well as a government report on crude oil inventories. In addition, the Federal Reserve is to announce the federal funds rate. The banks’ rate statement will be closely watched by investors for any clues to the future direction of monetary policy.
Thursday, September 22
The ZEW Centre for Economic Research is to release a report on economic sentiment in Switzerland, a leading indicator of economic health.
Later in the day, the U.S. is to publish its weekly report in initial jobless claims.