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EUR/CHF Weekly Forecast January 2-6, 2012, Fundamental Analysis

By:
FX Empire Editorial Board
Updated: Mar 5, 2019, 13:19 UTC

The EUR/CHF ended a bearish week, as the euro lost strength against the Swiss franc after the downbeat Italian bond auction on Thursday, which showed

EUR/CHF Weekly Forecast January 2-6, 2012, Fundamental Analysis

The EUR/CHF ended a bearish week, as the euro lost strength against the Swiss franc after the downbeat Italian bond auction on Thursday, which showed thatItalycould not borrow as much as targeted due to the unsustainable yields.

But in general, low volume dominated the market as the year came to an end, while choppy trading was evident as many investors were absent for the Christmas holiday.

This week volumes are expected to increase as investors will return from the Christmas and New Year holidays, especially with the heavy load of critical fundamentals awaited fromEurope.

The major fundamentals from Europe will be the Unemployment rate fromGermanyand the euro area-region, manufacturing and services data, inflation data and finally the retail sales index from the euro zone.

The EUR/CHF pair is expected to move significantly after the calmness that dominated the market in the past few sessions, where with the start of a new year the volumes shall improve, and volatility and heavy fluctuations are expected to return as the economic conditions inEuroperemain highly uncertain.

Other news from the euro area and Switzerland to affect the pair this week:

Monday January 2:

Germanywill start this week at 08:55 GMT with the final PMI Manufacturing index for December, where the manufacturing performance is expected unrevised at 48.1.

The euro zone will join this week at 09:00 GMT with the final PMI Manufacturing index for December, which is expected to linger at 46.9.

Switzerlandwill be on New Year’s DayHoliday.

Tuesday January 3:

Switzerlandwill start the session at 08:30 GMT with the PMI Manufacturing for December, which is expected to improve in the month to 45.4 from 44.8.

Germanywill join the session at 08:55 GMT with the unemployment report of December, where the seasonally adjusted unemployment rate is expected unchanged at 6.9%, while unemployment is expected to decline by 10 thousands compared with the previous decline of 20 thousands.

Wednesday January 4:

Germanywill start the day at 08:55 GMT with the final PMI Services index for December, which could have lingered at 52.7.

The euro zone will join the session at 09:00 GMT with the PMI Composite and Services final indexes for December, where both indexes are expected unchanged at 47.9 and 48.3 respectively.

At 10:00 GMT the euro-area region will provide markets with the annual CPI estimate of December, where inflation is expected lower at 2.8% from 3.0%.

Thursday January 5:

The euro zone will start the session at 10:00 GMT with the Industrial New Orders indexes for October, where the non-seasonally adjusted annual index could have expanded by 3.3% from 1.6%, while the seasonally adjusted monthly index could have expanded by 2.5% from the previous drop of 6.4%.

The euro zone will also release the PPI indexes for November, where the monthly index is expected to remain steady at 0.1%, while the annual index could have eased to 5.2% from 5.5%.

Friday January 6:

Switzerlandwill start the session at 08:15 GMT with the CPI index fro December, with expectations the monthly CPI index could have dropped by 0.1% from the previous drop of 0.2%, while the annual index is projected to drop by 0.6% from the previous drop of 0.5%. In addition, the monthly and annual CPI EU Harmonised previous readings were -0.4% and -0.8% respectively.

The euro zone will join the session at 10:00 GMT with Confidence Report of December, where the business climate indicator is expected to drop further to 0.46 from 0.44, while the consumer confidence final index is expected unrevised at -21.2. The economic confidence could have eased to 93.2 from 93.7, while the industrial and services confidence are projected to drop further to 7.5 and 2.1 from 7.3 and 1.7 respectively.

The euro-area region will also provide markets with the Retail Sales index and the Unemployment rate, where the annual retail sales index could have dropped by 0.9% from the previous drop of 0.9%, while the monthly index is projected to fall by 0.4% from the prior expansion of 0.4%. The unemployment rate could have remained unchanged at 10.3%.

Germanywill join the session at 11:00 GMT with the Factory Orders index for November, where the seasonally adjusted monthly index is projected to drop by 1.6% from the previous expansion of 5.2%, while the non-seasonally adjusted annual index could have fallen by 1.2% from the prior growth of 5.4%.

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