Forex - USD/CHF weekly outlook: March 14-18

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Forex Pros - Last week saw the U.S. dollar edge higher against the Swiss franc, as oil prices stabilized, easing concerns over the impact of higher energy costs on the U.S. economy, before trimming gains after Friday's earthquake in Japan.

USD/CHF hit 0.9368 on Wednesday, a two-week high; the pair subsequently consolidated at 0.9295 by close of trade on Friday, easing up 0.44% over the week.

The pair is likely to find support at 0.9233, last Monday's low and resistance at 0.9368, last Wednesday's high.

On Wednesday, official data showed that Swiss consumer prices rose 0.4% in February, taking the annual inflation rate to 0.5%. Analysts had expected the annual rate to rise 0.4%, from 0.3% in January.

Core inflation, which excludes volatile price components like food or energy and fuel, rose 0.1% in February.

The report said that the pick-up in inflation was driven by driven by higher rents and increasing costs for energy and fuel but the strength of the Swiss franc dampened the price increases for imported oil and food products, giving the Swiss National Bank leeway to hold interest rates unchanged this month.

The dollar remained down against the Swissie on Friday, after official data showed that U.S. retail sales rose by the most in four months in February. The Commerce Department said U.S. retail sales rose 1%, in line with expectations, following an upwardly revised 0.7% increase in January.

Next week, both the U.S. Federal Reserve and the SNB are to announce their benchmark interest rates, while geopolitical tensions in the Middle East and North Africa look likely to continue to weigh on market sentiment.

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, March 15

The U.S. is to publish official data on manufacturing activity in New York state, as well as government reports on import prices and the balance of domestic and foreign investment. In addition, the Federal Reserve is to hold its policy setting meeting before announcing its federal funds rate. The banks rate statement will be closely watched as it discusses the economic outlook and offers clues on the outcome of future votes.

Wednesday, March 16

In Switzerland, the ZEW Centre for Economic Research is to publish a report on economic expectations, a leading indicator of economic health.

The U.S. is to publish a flurry of government data, with reports on building permits, an excellent gauge of future construction activity, as well as data on producer price inflation, housing starts and crude oil stockpiles.

Thursday, March 17

Switzerland's State Secretariat for Economic Affairs is to publish its quarterly economic forecast, which looks at major GDP components such as consumption and investment, as well as employment and inflation. Later in the day, the SNB is to announce its three-month Libor rate and publish its rate statement, which offers clues on the outcome of future rate decisions. Also Thursday, Switzerland is to publish official data on industrial production.

The U.S. is to publish official data on initial jobless claims, the nation's earliest employment data. The country is also to publish government data on consumer price inflation, industrial production and the capacity utilization rate. Meanwhile, the Federal Reserve Bank of Philadelphia is to publish an index of manufacturing activity, a leading indicator of economic health.

Friday, March 18

Switzerland is to round up the week with official data on producer price inflation, a leading indicator of consumer price inflation.

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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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