EUR/CHF Forecast Jan. 23-27, 2012, Fundamental Analysis

EUR/CHF Forecast Jan. 23-27, 2012, Fundamental Analysis
EUR/CHF Forecast Jan. 23-27, 2012, Fundamental Analysis
The EUR/CHF pair fluctuated heavily and ended the session on Friday around the opening level seen on Monday, where the pair was almost changed at the end of the week as the Swiss franc and the common currency both moved in line with the positive sentiment seen in the market last week.

The impacts on the pair were driven by the euro, which was affected by the release of heavy fundamentals in addition to the several bond auctions in the euro-area region.

The euro gained strength against the Swiss franc in the first two sessions last week after France and the European Financial Stability Facility were able to access the capital market easily once again despite the credit rating downgrades; however, the euro and franc moved in line with the general sentiment in the market after then to end the week flat.

The EUR/CHF pair is expected to be volatile this week, especially when the pair approaches the minimum trading level of 1.2000 set by the Swiss National Bank, where the bank clarified before that it will defend this level strongly, as the appreciation in the Swiss franc hurts that economy and the nation’s exports.

This week with the lack of major fundamentals from Switzerland the focus will be on the developments in the euro-area region, which is to provide markets with data regarding the performance of the manufacturing and services sectors; however, the focus will be on the several bond auctions as investors will track whether the improvement seen in the yields and demand is set to last or not.

The release of the data this week will be as follow:

Monday January 23:

Switzerland will start this week at 08:00 GMT with the money supply M3 annual index for December, tracking any changes from the previous 7.2%.

The euro area will join the week with the advanced estimate for the January consumer confidence at 15:00 GMT and likely to see a slight improvement from the previous -21.1.

Auctions:

10:00 GMT Slovakia sells bills

10:15 GMT Germany sells bills

14:00 GMT France to sells bills

Tuesday January 24:

Germany is set to start the day with the advanced PMI estimate for January at 08:30 GMT where the manufacturing PMI is expected slightly higher at 49.0 from 48.4 and the services a notch higher at 52.5 from 52.4.

The euro area will release the flash January PMI estimates at 09:00 GMT with the Composite Index expected slightly higher at 48.5 from 48.3 as the Manufacturing rises to 47.3 from 46.9 and Services tick slightly higher to 49.0 from 48.8.

At 10:00 GMT the euro area Industrial New Orders Index for November is due and expected with a strong 2.9% drop on the year after 1.6% rise with the decline from the earlier month a steep 2.5% after 1.8% rise.

Auctions:

09:00 GMT Netherlands sells bills

09:30 GMT Spain sells bills

10:00 GMT Malta sells bills

Wednesday January 25:

Germany will take the lead with the IFO Confidence figures at 09:00 GMT for January. The Business Climate index is expected to tick higher to 107.6 from 107.2 while the Current Assessment is expected to move to 117.0 from 116.7, and finally the Expectations index is expected also with improvement to 99.0 from 98.4.

Auctions:

10:15 GMT Germany sells bills

Thursday January 26:

Germany will release the GFK Consumer Confidence index for February at 07:00 GMT and expected to remain steady at 5.6.

Auctions:

10:00 GMT Italy sells bills

Friday January 27:

Switzerland will start the session at 08:00 GMT with the KOF Swiss leading indicator, which is expected lower at -0.10 from the previous 0.01.

The euro area will end the week with the M3 Money Supply for December at 09:00 GMT, where the three month average is expected to slow to 2.3% from 2.5% and on the year to rise to 2.3% after 2.0%.

Auctions:

10:00 GMT Italy sells bills

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