Forex - USD/CHF weekly outlook: May 23-27

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Forex Pros – The Swiss franc strengthened against the U.S. dollar last week as concerns over sovereign debt issues in the euro zone boosted safe have demand and weaker-than-expected data weighed on the dollar.


USD/CHF hit 0.8746 on Friday, the pair’s lowest since May 10; the pair subsequently consolidated at 0.8771 by close of trade, tumbling 1.73% over the week.


The pair is likely to find support at 0.8675, the low of May 6 and resistance at 0.8937, last Monday’s high.


The Swiss franc rose against the dollar early in the week as lingering uncertainty over the possibility of debt restructuring in Greece dampened demand for riskier assets.


The franc advanced further on Friday after ratings agency Fitch downgraded Greece's credit ratings by three notches and said a “soft” restructuring of the country’s debt by European Union policy makers would be considered a default.


Meanwhile, data on Thursday showing a slowdown in manufacturing growth in the U.S. Mid-Atlantic region and an unexpected dip in existing home sales in April underlined the view that the Federal Reserve is unlikely to tighten policy for some time to come.
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Also Thursday, Switzerland’s Economy Minister Johann Schneider-Ammann urged the country's business elite to "learn to live" with the strong franc, indicating that the government is unlikely to step up measures to assist companies affected by the strong franc.


"The strong franc is creating many concerns," Schneider-Ammann said. "But we have to learn to live with it, want to live with it."


Looking ahead to the coming week, U.S. data on durable goods and a second look at first quarter gross domestic product will be a major focus of attention, while Switzerland is to publish official data on its trade balance and employment level.


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, May 24


The U.S. is to publish government data on new home sales, a leading indicator of economic health.


Wednesday, May 25

The U.S. is to publish official data on durable goods orders, a leading indicator of production, as well as a government report on crude oil stockpiles.


Thursday, May 26


Switzerland is to release official data on its trade balance, the difference in value between imported and exported goods and services, as well as data on the country’s employment level, a leading indicator of economic health.


Later in the day, the U.S. is to publish revised data on first quarter GDP, the broadest measure of economic activity and the primary gauge of the economy's health.  The U.S. is also to publish its weekly report on initial jobless claims.


Friday, May 27


Switzerland’s KOF Economic Research Agency is to publish an index of leading economic indicators, designed to predict the future direction of the economy.


The U.S. is to round up the week with a slew of economic data, including government reports on personal income and spending and industry data on pending home sales, while the University of Michigan is to publish revised data on consumer sentiment and inflation expectations.





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