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Forex - USD/CHF weekly outlook: February 4 - 8

Posted: 2/3/2013 7:44:00 AM
Referenced Stocks: - The U.S. dollar hit 10-month lows against the Swiss franc on Friday as U.S. jobs data suggested that the Federal Reserve would maintain its easing policies, while stronger U.S. manufacturing and consumer confidence data spurred risk appetite.

USD/CHF hit 0.9022; the pair's lowest since April 3 2012, before settling back to 0.9076 by the close, 0.28% lower for the day and down 2.07% for the week.

The pair is likely to find support at 0.9022, Friday's low and resistance at 0.9119, Thursday's high.

The U.S. Department of Labor said the economy added 157,000 jobs in December, slightly below expectations for a 160,000 increase, while the unemployment rate ticked up to 7.9% from 7.8% in November.

However, November and December nonfarm payrolls figures were revised sharply higher to 247,000 and 196,000 respectively.

Also Friday, data showed that U.S. manufacturing activity improved to a nine-month high in January while consumer sentiment unexpectedly improved in January.

The reports came two days after data showed that the U.S. economy contracted 0.1% in the fourth quarter, confounding expectations for growth of 1.1% and a sharp slowdown from growth of 3.1% in the preceding quarter.

At the conclusion of its policy meeting on Wednesday, the Fed said it will continue its USD85 billion a month quantitative easing program "if the outlook for the labor market does not improve substantially."

The U.S. central bank also reiterated that it will continue to hold interest rates close to zero until the unemployment rate falls below 6.5%.

In Switzerland, data on Friday showed that the SVME purchasing managers' index improved to 52.5 in January from a revised 49.2 the previous month as growing confidence that the worst of the crisis in the euro zone has passed supported Swiss exports.

In the week ahead, investors will be looking ahead to U.S. data on service sector activity, while data on the Swiss central bank's foreign currency reserves will also be in focus.

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

Monday, February 4

The U.S. is to release official data on factory orders, a leading indicator of production.

Tuesday, February 5

Switzerland is to publish government data on the trade balance, the difference in value between imports and exports.

The Institute of Supply Management is to publish a report on U.S. service sector activity.

Wednesday, February 6

The U.S. is to release government data on crude oil inventories.

Thursday, February 7

The Swiss National Bank is to publish a report on foreign currency reserves, which give an insight into the extent of the bank's currency market operations. Switzerland is also to produce official data on consumer climate.

The U.S. is to release the weekly government report on initial jobless claims.

Friday, February 8

Switzerland is to release official data on the unemployment rate and on retail sales, the government measure of consumer spending, which accounts for the majority of overall economic activity.

The U.S. is to round up the week with official data on the trade balance. - offers an extensive set of professional tools for the Forex, Commodities, Futures and the Stock Market including real-time data streaming, a comprehensive economic calendar, as well as financial news and technical & fundamental analysis by in-house experts.
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