Forex - USD/CHF weekly outlook: April 4-8

Investing.com – The U.S. dollar trimmed gains against the Swiss franc on Friday, following dovish remarks by a senior Federal Reserve official after earlier surging to a three-week high, boosted by better-than-expected U.S. employment data.

USD/CHF hit 0.9340 on Friday, the pair’s highest since March 11; the pair subsequently consolidated at 0.9236 by close of trade on Friday, gaining 0.22% over the week.

The pair is likely to find support at 0.9125, last Thursday’s low and resistance at 0.9340, Friday’s high.

The greenback’s gains came after the Department of Labor said that payrolls rose by 216,000 in March after a 194,000 gain the prior month, outstripping expectations for a 188,000 increase. The unemployment rate unexpectedly slid to a two-year low of 8.8%, from 8.9% in February, the Labor Department said.

But the greenback pared gains after New York Federal Reserve President William Dudley said he saw no reason to adjust the central bank's loose monetary policy despite the encouraging jobs data.

Earlier in the week, the vice-chairman of the Swiss National Bank Thomas Jordan said that the Swiss franc's surge against the dollar had limited the Swiss central bank's leeway to raise interest rates.

"We are concerned. The (franc's) rise is tightening monetary conditions and that limits our room for maneuver in normalizing interest rates," Jordan said.

The Swiss currency's strength has been the key reason for the central bank to keep borrowing costs at ultra-low levels, despite a brighter growth outlook.

In the week ahead, the Federal Reserve is to publish the minutes of its most recent policy setting meeting, while the U.S. is to publish its weekly report on initial jobless claims. Meanwhile, Switzerland is to publish government data on inflation.

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

Monday, April 4

Federal Reserve Chairman Ben Bernanke is to speak at a public engagement; his comments will be closely watched for clues to the future possible direction of monetary policy.

Tuesday, April 5

The Federal Reserve is to publish the minutes of the most recent policy setting meeting of the Federal Open Market Committee. The minutes contain in-depth insights into the economic and financial conditions that influenced their vote on where to set interest rates. Meanwhile, the U.S. Institute of Supply Management is to publish a report on service sector growth, a leading indicator of economic health.

Wednesday, April 6

Switzerland is to release official data on consumer price inflation which accounts for a majority of overall inflation. Later in the day, the U.S. is to publish a government report on crude oil inventories.

Thursday, April 7

The U.S. is to publish a key weekly report on initial jobless claims, the nation’s earliest employment data as well as data on consumer credit and natural gas inventories.

Friday, April 8

Switzerland is to publish government data on the country’s unemployment rate, a leading indicator of economic health. Elsewhere, the U.S. is to round up the week with a report on wholesale inventories, an important indicator of future business spending.