Weekly Outlook: 2014, June 22 - 29

USD/CHF weekly outlook: June 23 - 27

The dollar pushed higher against the Swiss franc on Friday, trimming the week’s losses after the Federal Reserve signaled that interest rates will remain low for a considerable time after the bank’s asset purchase program ends.

USD/CHF eased up 0.12% to 0.8949 late Friday, paring the week’s losses to 0.58%.

The pair is likely to find support at 0.8909, Thursday’s low and resistance at 0.8998, Wednesday’s high.

The greenback weakened broadly after the Fed gave no indication of when interest rates could start to rise at the conclusion of its two-day meeting on Wednesday. In addition, the Fed’s forecast of where interest rates might reach in the long term fell from 4% to 3.75%.

The central bank cut its bond purchases by $10 billion a month, to $35 billion, saying there was "sufficient underlying strength" in the U.S. economy to continue tapering.

Despite this, the Fed lowered its forecast for growth this year to a range of 2.1% to 2.3% from 2.8 to 3.0% previously, due to "unexpected contractions" in the first quarter as a result of the unusually harsh winter.

The Fed acknowledged the recent increases in inflation and drop in unemployment, but Chair Janet Yellen said no formula was in place for when interest rates would start to rise.

The US Dollar Index, which tracks the performance of the greenback versus a basket of six other major currencies, edged up to 80.41 late Friday from lows of 80.24 on Thursday. For the week, the index lost almost 0.3%.

The Swiss National Bank kept its benchmark interest rate unchanged close to zero on Thursday and reaffirmed its commitment to the minimum exchange rate of CHF1.20 per euro.

The accompanying rate statement released after the announcement said the Swiss franc is “still high.”

The SNB said it would continue to enforce the minimum exchange rate of 1.20 per euro with the utmost determination and reiterated that it is prepared to purchase foreign currency in “unlimited quantities” and take further measures if required.

In the coming week, the U.S. is to release data on consumer confidence, durable goods orders and home sales, while Switzerland is set to release its latest trade data.

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

Monday, June 23

• The U.S. is to release preliminary data on manufacturing activity and private sector data on existing home sales.

Tuesday, June 24

• Switzerland is to publish data on the trade balance, the difference in value between imports and exports.
• The U.S. is to release private sector data on consumer confidence, as well as a report on new home sales.

Wednesday, June 25

• The U.S. is to publish data on durable goods orders, as well as revised data on first quarter growth.

Thursday, June 26

• The U.S. is to release data on personal income and expenditure, as well as data on inflation linked to personal spending.

Friday, June 27

• Switzerland is to publish its KOF economic barometer.
• The U.S. is to round up the week with revised data on consumer sentiment from the University of Michigan

USD/CAD weekly outlook: June 23 - 27

The U.S. dollar slumped to five-and-a-half month lows against the Canadian dollar on Friday, following the release of stronger-than-forecast data on Canadian inflation and retail sales.

USD/CAD was down 0.56% to 1.0757 late Friday, the weakest level since January 7. For the week, the pair lost 0.93%.

The pair is likely to find support at 1.0725 and resistance at 1.0825, Friday’s high.

The Canadian dollar surged after Statistics Canada reported that the annual rate of inflation rose to 2.3% in May, ahead of forecasts of 2.1%.

It was the first time in more than two years that the annual inflation rate exceeded the Bank of Canada’s 2% target, fuelling optimism over the economic recovery.

The BoC kept its benchmark interest rate on hold at 1% earlier this month, reiterating concerns that low inflation and weak exports are acting as a drag on growth.

Consumer prices were 0.5% higher in May from a month earlier, beating forecasts for 0.2%.

The loonie, as the Canadian dollar is also known, received an additional boost after a separate report showed that domestic retail sales jumped 1.1% in April, easily outstripping forecasts of 0.4%.

The greenback remained under pressure after the Federal Reserve indicated that rates would remain on hold despite the improving U.S. economic outlook.

At the conclusion of its two-day policy meeting on Wednesday the central bank cut its bond purchases by $10 billion, to $35 billion a month, saying there was "sufficient underlying strength" in the U.S. economy to continue tapering.

Despite this, the Fed lowered its forecast for growth this year due to "unexpected contractions" in the first quarter as a result of the unusually harsh winter.

The Fed acknowledged the recent increases in inflation and drop in unemployment, but Chair Janet Yellen said no formula was in place for when interest rates would start to rise.

The US Dollar Index, which tracks the performance of the greenback versus a basket of six other major currencies, edged up to 80.41 late Friday from lows of 80.24 on Thursday. For the week, the index lost almost 0.3%.

In the coming week, the U.S. is to release data on consumer confidence, durable goods orders and home sales, while Canada is not scheduled to release any major economic reports.

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

Monday, June 23

• The U.S. is to release a preliminary report on manufacturing activity and private sector data on existing home sales.

Tuesday, June 24

• The U.S. is to release private sector data on consumer confidence, as well as a report on new home sales.

Wednesday, June 25

• The U.S. is to publish data on durable goods orders, in addition to revised data on first quarter growth.

Thursday, June 26

• The U.S. is to release data on personal income and expenditure, as well as data on inflation linked to personal spending.

Friday, June 27

• Canada is to release a report on raw material price inflation.
• The U.S. is to round up the week with revised data on consumer sentiment from the University of Michigan.

NZD/USD weekly outlook: June 23 - 27

The New Zealand dollar ended Friday’s session close to a six-week high against its U.S. counterpart, amid indications the Federal Reserve will keep interest rates at record-low levels for a considerable time.

NZD/USD hit 0.8734 on Wednesday, the pair’s highest since May 6, before subsequently consolidating at 0.8696 by close of trade on Friday, down 0.24% for the day but 0.35% higher for the week.

The pair is likely to find support at 0.8653, the low from June 18 and resistance at 0.8731, the high from June 19.

Concerns over the ongoing Sunni insurgency in Iraq hit market sentiment on Friday, as government forces fought with Sunni militants for control of a 300,000 barrel-per-day refinery in the northeast part of the country, fuelling concerns over a disruption to global supplies.

U.S. President Barack Obama said Thursday he would send 300 members of the special-operations forces to Iraq and added he was prepared to take "targeted" military action later if deemed necessary.

The kiwi rallied to a six-week high against the greenback after the Federal Reserve gave no indication of when interest rates could start to rise at the conclusion of its two-day meeting on Wednesday. In addition, the Fed’s forecast of where interest rates might reach in the long term fell from 4% to 3.75%.

The central bank cut its bond purchases by $10 billion a month, to $35 billion, saying there was "sufficient underlying strength" in the U.S. economy to continue tapering.

Despite this, the Fed lowered its forecast for growth this year to a range of 2.1% to 2.3% from 2.8 to 3.0% previously, due to "unexpected contractions" in the first quarter as a result of the unusually harsh winter.

The Fed acknowledged the recent increases in inflation and drop in unemployment, but Chair Janet Yellen said no formula was in place for when interest rates would start to rise.

Elsewhere, in New Zealand, data released earlier in the week showed that New Zealand's economy grew by 1% in the first quarter, compared to expectations for an expansion of 1.2%.

In the coming week, market players will focus on U.S. consumer confidence, durable goods orders and home sales data for further indications on the strength of the economy.

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

Monday, June 23

• China is to publish the preliminary reading of the HSBC manufacturing index.
• The U.S. is to release preliminary data on manufacturing activity and private sector data on existing home sales.

Tuesday, June 24

• The U.S. is to release private sector data on consumer confidence, as well as a report on new home sales.

Wednesday, June 25

• The U.S. is to publish data on durable goods orders, as well as revised data on first quarter growth.

Thursday, June 26

• The U.S. is to release data on personal income and expenditure, as well as data on inflation linked to personal spending.

Friday, June 27

• New Zealand is to publish data on the trade balance.
• The U.S. is to round up the week with revised data on consumer sentiment.

AUD/USD weekly outlook: June 23 - 27

The Australian dollar fell from a one-week high against its U.S. counterpart on Friday, as concerns over escalating violence in Iraq dampened demand for riskier assets.

AUD/USD hit 0.9430 on Thursday, the pair’s highest since June 12, before subsequently consolidating at 0.9390 by close of trade on Friday, down 0.09% for the day and 0.12% lower for the week.

The pair is likely to find support at 0.9320, the low from June 18 and resistance at 0.9430, the high from June 19.

Market players continued to monitor events in Iraq, as government forces fought with Sunni militants for control of a 300,000 barrel-per-day refinery in the northeast part of the country, fuelling concerns over a disruption to global supplies.

U.S. President Barack Obama said Thursday he would send 300 members of the special-operations forces to Iraq and added he was prepared to take "targeted" military action later if deemed necessary.

The Aussie rallied to a one-week high against the greenback on Thursday after the Federal Reserve gave no indication of when interest rates could start to rise at the conclusion of its two-day meeting on Wednesday. In addition, the Fed’s forecast of where interest rates might reach in the long term fell from 4% to 3.75%.

The central bank cut its bond purchases by $10 billion a month, to $35 billion, saying there was "sufficient underlying strength" in the U.S. economy to continue tapering.

Despite this, the Fed lowered its forecast for growth this year to a range of 2.1% to 2.3% from 2.8 to 3.0% previously, due to "unexpected contractions" in the first quarter as a result of the unusually harsh winter.

The Fed acknowledged the recent increases in inflation and drop in unemployment, but Chair Janet Yellen said no formula was in place for when interest rates would start to rise.

In the coming week, market players will focus on U.S. consumer confidence, durable goods orders and home sales data for further indications on the strength of the economy.

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

Monday, June 23

• China is to publish the preliminary reading of the HSBC manufacturing index.
• The U.S. is to release preliminary data on manufacturing activity and private sector data on existing home sales.

Tuesday, June 24

• The U.S. is to release private sector data on consumer confidence, as well as a report on new home sales.

Wednesday, June 25

• The U.S. is to publish data on durable goods orders, as well as revised data on first quarter growth.

Thursday, June 26

• The U.S. is to release data on personal income and expenditure, as well as data on inflation linked to personal spending.

Friday, June 27

• The U.S. is to round up the week with revised data on consumer sentiment.

GBP/USD weekly outlook: June 23 - 27

The pound pulled back from more than five year highs against the dollar on Friday but remained supported above the 1.70 level by expectations that the Bank of England will raise interest rates ahead of its major peers.

GBP/USD slipped 0.15% to 1.7014 late Friday, down from highs of 1.7062 reached on Thursday, the strongest level since October 21, 2008. For the week, the pair gained 0.22%.

Cable was likely to find support at 1.6950 and resistance at 1.7064.

Sterling has strengthened this year amid expectations that the accelerating economic recovery will prompt the BoE to raise interest rates sooner than other central banks.

Wednesday’s minutes of the BoE’s June meeting showed that the bank was "somewhat surprised" that the financial markets were pricing in a low probability of interest rates rising this year.

Some monetary policy committee members believe the question of whether enough spare capacity has been absorbed has become "more balanced" since last month the minutes said.

BoE Governor Mark Carney said earlier this month that rates could rise sooner than investors expect. The remarks prompted investors to bring forward expectations for a rate hike to the end of this year from the first quarter of 2015.

The greenback remained under pressure after the Federal Reserve indicated Wednesday that rates would remain on hold for longer, despite the improving U.S. economic outlook.

At the conclusion of its two-day policy meeting, the central bank cut its bond purchases by $10 billion, to $35 billion a month, saying there was "sufficient underlying strength" in the U.S. economy to continue tapering.

Despite this, the Fed lowered its forecast for growth this year due to "unexpected contractions" in the first quarter as a result of the unusually harsh winter.

The Fed acknowledged the recent increases in inflation and drop in unemployment, but Chair Janet Yellen said no formula was in place for when interest rates would start to rise.

The US Dollar Index, which tracks the performance of the greenback versus a basket of six other major currencies, edged up to 80.41 late Friday from lows of 80.24 on Thursday. For the week, the index lost almost 0.3%.

In the coming week, the U.S. is to release data on consumer confidence, durable goods orders and home sales, while the BoE is to publish its financial stability report.

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

Monday, June 23

• The U.S. is to release preliminary data on manufacturing activity and private sector data on existing home sales.

Tuesday, June 24

• The U.S. is to release private sector data on consumer confidence, as well as a report on new home sales.

Wednesday, June 25

• The U.K. is to release private sector data on retail sales.
• The U.S. is to publish data on durable goods orders, as well as revised data on first quarter growth.

Thursday, June 26

• The BoE is to publish its financial stability report and Governor Mark Carney is to hold a press conference to discuss the report.
• The U.S. is to release data on personal income and expenditure, as well as data on inflation linked to personal spending.

Friday, June 27

• The U.K. is to produce data on the current account and final data on first quarter growth.
• The U.S. is to round up the week with revised data on consumer sentiment.

EUR/USD weekly outlook: June 23 - 27

The dollar inched higher against the euro on Friday, but still ended the week lower after the Federal Reserve indicated that its isn’t going to raise interest rates for a long period of time.

EUR/USD dipped 0.06% to 1.3598 late Friday, but posted a weekly gain of 0.47%.

The pair is likely to find support at 1.3540 and resistance at 1.3650.

The greenback remained under pressure after the Fed gave no indication of when interest rates could start to rise at the conclusion of its two-day meeting on Wednesday. In addition, the Fed’s forecast of where interest rates might reach in the long term fell from 4% to 3.75%.

The central bank cut its bond purchases by $10 billion a month, to $35 billion, saying there was "sufficient underlying strength" in the U.S. economy to continue tapering.

Despite this, the Fed also lowered its forecast for growth this year to a range of 2.1% to 2.3% from 2.8 to 3.0% previously, due to "unexpected contractions" in the first quarter as a result of the unusually harsh winter.

The Fed acknowledged the recent increases in inflation and drop in unemployment, but Chair Janet Yellen said no formula was in place for when interest rates would start to rise.

Elsewhere, the euro ended the week higher against the yen, with EUR/JPY ending Friday’s session at 138.84, for a weekly gain of 0.59%.

The US Dollar Index, which tracks the performance of the greenback versus a basket of six other major currencies, edged up to 80.41 late Friday from lows of 80.24 on Thursday. For the week, the index lost almost 0.3%.

In the coming week, the U.S. is to release data on consumer confidence, durable goods orders and home sales. Flash estimates on euro zone private sector activity will also be closely watched.

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

Monday, June 23

• The euro zone is to release data on manufacturing and service sector activity, while Germany and France are to release individual reports.
• The U.S. is to release preliminary data on manufacturing activity and private sector data on existing home sales.

Tuesday, June 24

• In the euro zone, the Ifo Institute is to publish data on German business climate.
• The U.S. is to release private sector data on consumer confidence, as well as a report on new home sales.

Wednesday, June 25

• Market research group Gfk is to publish a report on German consumer climate.
• The U.S. is to publish data on durable goods orders, as well as revised data on first quarter growth.

Thursday, June 26

• The U.S. is to release data on personal income and expenditure, as well as data on inflation linked to personal spending.

Friday, June 27

• In the euro zone, Germany and Spain are to release preliminary data on consumer price inflation, while France is to publish data on consumer spending.
• The U.S. is to round up the week with revised data on consumer sentiment from the University of Michigan.

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