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Forex - USD/CHF weekly outlook: August 29 - September 2

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Forexpros - Last week saw the U.S. dollar spike to a five-week high against the Swiss franc on Friday, after Federal Reserve Chairman Ben Bernanke stopped short of announcing fresh monetary stimulus, before paring gains amid concerns over the outlook for U.S. economic growth.

USD/CHF hit 0.8149 on Friday, the pair's highest since July 25; the pair subsequently consolidated at 0.8059 by close of trade on Friday, gaining 1.93% over the week.

The pair is likely to find support at 0.7768, the low of August 16 and resistance at 0.8149, Friday's high.

Speaking Friday at the central bank's annual retreat in Jackson Hole, Wyoming, Bernanke said the Fed remained prepared to implement fresh measures to stimulate the faltering U.S. economy, but stopped short of outlining when and if this may happen.

The bank's September policy-setting meeting will run for two days instead of one, in order to "allow a fuller discussion" of the economic outlook, Bernanke said.

The comments saw the Swissie fall sharply against the greenback, after rising on Thursday, amid expectations that the Fed chairman would unveil a third round of quantitative easing.

But the Swissie regained ground against the greenback after the U.S. Commerce Department said the economy expanded more slowly than forecast in the second quarter, as higher fuel prices, poor weather conditions and disruptions to manufacturing activity from the March earthquake in Japan weighed.

Gross domestic product rose by 1%, disappointing expectations for an expansion of 1.1%. The Commerce Department had originally estimated GDP growth of 1.3% in the second quarter.

The Swissie had remained in a narrow range against the greenback early in the week, amid fears that the Swiss National Bank would undertake fresh measures to weaken the currency.

Earlier in the month, Switzerland's central bank slashed interest rates to near zero, saying the currency was "massively overvalued."

Looking ahead, investors will be focusing on Friday's release of U.S. data on non-farm payrolls in order to gauge the strength of the U.S. recovery.

Also next week, the U.S. Institute of Supply Management is to publish its index of manufacturing activity for August, while Switzerland is to release data on second quarter GDP.

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

Monday, August 29

The U.S. is to produce industry data on pending home sales, a leading indicator of health in the housing market. The nation is also to release official data on personal income and expenditure and consumer prices.

Tuesday, August 30

Switzerland's UBS bank is to publish its consumption index, an important indicator of consumer spending.

Later in the day, the U.S. is to release data on consumer confidence, a leading indicator of consumer spending, as well as an industry report on house price inflation. In addition, the Federal Reserve's Open Market Committee is to publish the minutes of its most recent policy-setting meeting.

Wednesday, August 31

In the U.S., payroll processing firm ADP is to release a report on non-farm payrolls, which leads government data by two days. The U.S. is also to publish data on manufacturing activity in the Chicago area, factory orders and crude oil stockpiles.

Thursday, September 1

Switzerland is to publish official data on GDP, an all-inclusive measure of economic activity and the most important indicator of economic growth.

The country is also to produce government data on retail sales, the foremost indicator of consumer spending, which accounts for the majority of overall economic activity, as well as official data on manufacturing sector activity.

Later in the day, the U.S. is to publish its closely watched weekly report on initial jobless claims, while the ISM is to produce data on manufacturing growth, a leading indicator of economic health.

Friday, September 2

The U.S. is to round up the week with a government report on private sector job creation, a key indicator of overall economic health. The country is also to publish official data on the unemployment rate and average hourly earnings, an important inflationary indicator.

Also Friday, Switzerland is to produce official data on the country's employment level.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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