US dollar advanced against the Swiss franc on Tuesday, following the unexpected slow down in retail sales in Switzerland in May, while expectations of FED to begin tapering its Quantitative Easing by the end of this year still weighed on sentiment.
USD/CHF hit a session high and highest point since May 29th at 0.9679 at 8:10 GMT, after which consolidation followed at 0.9669. Support was expected at July 5th low, 0.9566, while resistance was to be encountered at 0.9718.
A report showed earlier today that Swiss retail sales indicator unexpectedly slowed down its increase in May, adding 1.8% on annual basis, with seasonal adjustments applied. This result was significantly weaker than Aprils data, when sales rose by 3.1%, a revision down from 3.3% previously. Mays drop was influenced mainly by the 0.3% decrease in sales of first necessity goods, which has been fractionally eased by the 2.8% increase in sales of goods, excluding first necessities. Overall retail trade volumes erased 0.1% in May on a monthly basis, while in April volumes were 1.3% higher.
Meanwhile, US dollar’s trend upwards seemed likely to continue, following the strong employment data from the United States on July 5th, which showed that economy added 195 000 job positions in June, surpassing the initially estimated 165 000. In June FED Chairman Ben Bernanke said that the central bank intended to scale back its easing program by the end of 2013, if US economic conditions were to meet FED’s objectives. In addition, Foreign Open Market Committee (FOMC) meeting protocol, that could provide more guidance on future policy, was expected on Wednesday.
Swiss franc was lower versus the euro as well, with EUR/CHF pair advancing 0.36% to reach 1.2446.
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