Thursday June 30
The Swiss franc retreated against the dollar and all high-yielding currencies for the second day amid some optimism in markets after the approval of the Greek Parliament to the five-year austerity plan needed to get the fifth tranche of last year’s 110-aid package. The franc was damped as the most favorable safe have due the progress seen by the Swiss economy and proximity from euro area economies which are Switzerland’s largest market.
Regarding fundamentals, the Swiss current account surplus narrowed to 17.3 billion francs in the first quarter compared with 19.4 billion francs surplus in the fourth quarter. The surplus in goods account narrowed to 5.1 billion francs from 5.6 billion francs a year earlier. The data is threatening as it raises alerts concerning the franc’s strength which affected exporters.
On the other hand, the US dollar showed decline against a basket of major currencies with the last day of QE2 amid no talks about QE3. There worries as the unprecedented measures end coincide with the slowdown in the US economy, as seen by the latest data, yet the dollar may benefit from the end of the program as its supply will be lower in the market.
In the US economy, initial jobless claims retreated to 428,000 in the week ended June 18 from 429,000 a week before.
Friday July 1
The main focus will be on manufacturing data in both economies as at 07:15 GMT Switzerland will release SVME purchasing Managers Index for June. On the other hand, ISM manufacturing is set to decline to 52.0 in June from 53.5 in May, as of 14:00 GMT. Yet, before the release of ISM manufacturing, at 13:55 GMT, investors will follow University of Michigan confidence which is predicted to advance to 72.0 in June from 71.8.
Manufacturing data from both economies may have an impact on the pair, especially after the slowdown seen in major econmeis in the wake of the worldwide sluggish growth in the second quarter.