Forex - USD/CHF weekly outlook: May 9-13

Investing.com – The week ending May 6 saw the U.S. dollar touch a fresh record low against the Swiss franc on Wednesday, before rebounding to close the week higher, boosted by better-than-expected U.S. employment data.

USD/CHF hit 0.8551 on Wednesday, the pair’s all-time low; the pair subsequently consolidated at 0.8785 by close of trade on Friday, gaining 1.55% over the week.

The pair is likely to find short-term support at 0.8551, last Wednesday’s low and the all-time low and resistance at 0.8873, the high of April 25.

The Swiss franc has risen to a series of record highs against the dollar in recent months, as favorable Swiss economic conditions have added to expectations for rate hikes by the Swiss National Bank in the coming months.

Meanwhile, the dollar has weakened broadly since U.S. Federal Reserve Chairman Ben Bernanke signaled last month that the central bank was not likely to tighten monetary policy for some time to come.

The greenback strengthened on Friday after official data showed that U.S. nonfarm payrolls rose by 244,000 in April, as the private sector posted the strongest employment gain in five years.

A separate report showed that the U.S. unemployment rate rose to 9.0% last month from 8.8% in March. It was the first increase in the jobless rate since November, when it hit 9.8%. Economists had forecast that payrolls would rise by 185,000 and that the jobless rate would remain unchanged at 8.8%.

In the coming week, investors will be looking towards U.S. data on retail sales and inflation to gauge the strength of the U.S. economic recovery while Switzerland is also 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. The guide skips Monday as there are no relevant events on this day.

Tuesday, May 10

Switzerland is to publish official data on consumer price inflation, which accounts for a majority of overall inflation, as well as a government report on consumer climate, a leading indicator of consumer spending.

In addition, the U.S. is to release official data on import prices, an important inflationary indicator as well as data on economic optimism and wholesale inventories.

Wednesday, May 11

The U.S. is to publish official data on its trade balance, the difference in value between imported and exported goods and services. In addition, the country is to publish government data on crude oil inventories and the federal budget balance.

Thursday, May 12

The U.S. is to publish a weekly report on initial jobless claims as well as official data on producer price inflation, a leading indicator of consumer inflation. The country is also to publish government data on retail sales, the primary gauge of consumer spending, which accounts for the majority of overall economic activity.

Later in the day, Federal Reserve Chairman Ben Bernanke is to testify before the Senate Banking Committee in Washington.

Friday, May 13

Switzerland is to publish official data on producer price inflation, a leading indicator of consumer inflation.

Meanwhile, the U.S. is to round up the week with official data on consumer price inflation while the University of Michigan is to publish preliminary data on consumer sentiment and inflation expectations.