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

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Forex Pros - The broadly weaker U.S. dollar tumbled to a record low against the Swiss franc last week after significantly weaker-than-expected U.S. employment data added to evidence of a slowdown in the U.S. economic recovery.

USD/CHF hit 0.8545 on Tuesday, the weeks high, the pair subsequently consolidated at 0.8434 by close of trade on Friday, tumbling 2.05% over the week.

The pair is likely to find short-term support at 0.8250 and resistance at 0.8452, Thursday's high.

On Friday, the U.S. Department of Labor said nonfarm payrolls rose much less-than-expected in May, increasing by just 54K as the private sector posted the smallest jobs gain in nearly a year. Analysts had expected nonfarm payrolls to rise by 169K last month. The unemployment rate unexpectedly rose to 9.1% from 9.0% in April.

The report came after U.S. data earlier in the week showed that manufacturing activity slumped to a one-year low in May, while consumer confidence dropped to a six-month low.

Moody's Investors Service said Thursday it may place the U.S. government's rating under review for possible downgrade based on progress by Congress and the Obama administration on increasing the statutory debt limit in coming weeks.

Earlier in the week, official data showed that Swiss retail sales rose sharply in April while the manufacturing sector picked up in May.

The reports came after data on Tuesday showed that Swiss economic growth slowed more than expected in the first quarter, despite robust exports in the face of the record strong franc.

The Swiss State Secretariat for Economic Affairs said gross domestic product grew by 0.3% in the first quarter, compared with 0.8% in the previous three-month period and 2.4% on the year, from 3.1% in the fourth quarter.

Economists had expected GDP to increase by 0.6% on the quarter and 3.1% year-on-year.

In the coming week, Switzerland is to publish official data on inflation, while Federal Reserve Chairman Ben Bernanke is to speak.

Ahead of the coming week, Forex Pros 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, June 7

Switzerland is to publish government data on consumer price inflation, which accounts for a majority of overall inflation.

Later in the day, the U.S. is to publish official data on consumer credit, which is correlated with consumer confidence and spending. Also Tuesday, Federal Reserve Chairman Ben Bernanke is to speak; his comments will be closely watched for any clues to the future possible direction of monetary policy.

Wednesday, June 8

Switzerland is to publish official data on the unemployment rate, an important of economic health.

Later in the day, the U.S. is to publish official data on crude oil inventories while the Federal Reserve is to publish its Beige Book, which gives insights into the data policymakers looked at when making their interest rate decision.

Thursday, June 9

The U.S. is to publish official data on the trade balance, the difference in value between imported and exported goods and services over the month, as well as its weekly report on initial jobless claims.

Friday, June 10

The U.S. is to round up the week with official data on import prices, which contribute to overall inflation, while the Federal Reserve is to publish a report on the federal budget balance.

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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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