Despite a steep drop coming into the New York session, the USDCHF currency pair is forecast to make a rebound in later trades on upcoming economic data from the world’s largest economy. Orders for durable goods probably climbed in December, showing that the nation’s manufacturing sector saw some stability towards the end of the year after a mid-year slump.
The US dollar fell opposite the Swiss franc by 31 pips on a temporary halt to the rally in the European stock markets. This led to an immediate demand for the European safety asset. Nevertheless, the cautiousness of European investors is not seen to carry over to the New York exchanges as earnings reports from Caterpillar, Yahoo and BMC Software are expected later today.
The 2 percent gain in bookings for goods meant to last at least three years would follow a 0.8 percent rise in November, according to the median forecast of 64 economists surveyed by Bloomberg. Orders excluding demand for transportation equipment, which is often volatile, is forecast to have advanced for a fourth consecutive month at a 0.8 percent clip in December.
Improving auto sales and a rebound in housing are underpinning the economic expansion, indicating orders will keep coming in for manufacturers from General Electric Co. to DuPont Co. Faster growth in overseas markets and an agreement in Congress to avoid automatic government-spending cuts would help lift business confidence and spur greater investment.
“Manufacturing is looking better,” said Jennifer Lee, a senior economist at BMO Capital Markets in Toronto. “Demand has been improving nicely.”
Considering these upcoming fundamental data, a buy bias is suggested for the Dollar-Franc today. However, be on the lookout for probable technical corrections.
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