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Forex - USD/CHF weekly outlook: May 30 - June 3

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Forex Pros - The broadly stronger Swiss franc surged to a record high against the U.S. dollar on Friday, as a combination of concerns over the outlook for U.S. economic growth and euro zone sovereign debt issues weighed on risk sentiment.

USD/CHF hit 0.8461 on Friday, the pair's all-time low; the pair subsequently consolidated at 0.8503 by close of trade, dropping 3.26% over the week.

The pair is likely to find support at 0.8300 and resistance at 0.8662, last Friday's high.

On Friday, the National Association of Realtors' said pending home sales index fell 11.6% in April, much worse that the 1.0% decline forecast. A separate report showed that U.S. customer spending rose just 0.4% last month, less than the expected 0.5% gain.

Earlier in the week, revised data showed that U.S. gross domestic product grew more slowly than forecast in the first quarter, rising at 1.8% annual rate, disappointing expectations for a 2.1% increase.

Meanwhile, on Friday, a leading Swiss growth indicator showed that the record strength of the Swiss franc failed to take to take the edge of export activity.

The KOF Swiss Economic Institute said its economic barometer was unchanged at 2.3 in May, defying expectations for a decline to 2.2.

Government data on Thursday showed that Swiss exports rose 11.6% in April from a year earlier but the price of goods fell, indicating that exporters were seeing their margins squeezed.

Earlier last week, Swiss National Bank Vice Chairman Thomas Jordan said he was "very worried" about the rise in the Swiss franc but said interest rates can remain low for a relatively long period if inflation risks are benign.

Looking ahead, U.S. markets will be closed on Monday for a public holiday, while investors will be looking towards Friday's data on U.S. non-farm payrolls to gauge the strength of the economic recovery. Meanwhile, Switzerland is to publish official data on first quarter GDP and retail sales.

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

Monday, May 30

Markets in the U.S. are to remain closed for Memorial Day.

Tuesday, May 31

Switzerland is to publish official data on first quarter GDP, the broadest measure of economic activity and the primary gauge of the economy's health. The country is also to publish an index of leading indicators, designed to predict the future direction of the economy.

Also Tuesday, the U.S. is to publish industry data on house price inflation and consumer confidence, as well as an index of manufacturing activity in the Chicago area.

Wednesday, June 1

Switzerland is to publish government data on retail sales, the primary gauge of consumer spending, which accounts for the majority of overall economic activity. The country is also to publish official data on activity in the manufacturing sector, a leading indicator of economic health.

Later Wednesday, U.S. payroll processing firm ADP is to publish its report on non-farm payrolls, which leads government data by two days. Meanwhile, the U.S. Institute of Supply Management is to publish data on manufacturing activity.

Thursday, June 2

Markets in Switzerland will remain closed for Ascension Day.

Elsewhere, the U.S. is to publish its weekly report on initial jobless claims, as well as revised data on non-farm productivity and labor costs. The country is also to publish official data on factory orders, a leading indicator of production, and a government report on crude oil stockpiles.

Friday, June 3

The U.S. is to round up the week with a flurry of data, including a government report on non-farm employment change, a big market mover. The U.S. is also to release official data on the overall unemployment rate and average hourly earnings, while the U.S. Institute of Supply Management is to publish its index of service sector growth.

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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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